Are exporters more likely to introduce product innovations?

We analyze the relationship between a firm’s export status and its product innovation activity by using a rich firm-level survey on Italian manufacturing. We find that the positive association between exporting and product innovativeness is robust to controlling for many sources of firm’s observable heterogeneity. Use of an instrumental variables strategy allows us to conclude that this association can be qualified as a causal relation: firm’s export status induces product innovations (learning by exporting). This effect emerges over and above the correlation accounted for by some of the main channels of influence commonly emphasized by the existing literature. In the light of this evidence, we discuss the sources from which the residual effect of exporting on product innovation that we observe may originate