Linkages between R&D, innovation, investment and export performance: evidence from European manufacturing firms

This work explores the interrelations between a firm’s export performance
and innovation and tangible investments. We lay emphasis on the role
played by R&D in stimulating both innovation and the accumulation of
physical assets. Our study is novel in proposing an integrated model
with investment, innovation and R&D, in a framework of simultaneous
equations which take into account their mutual correlations.
Econometric results suggest that both product innovation and tangible
investments are significantly and jointly linked to the export intensity of
European manufacturing firms. This has significant implications from the
managerial perspective. Managers are asked to capitalise on R&D and,
while trying to improve their export performance, they should focus on
tangible investments and innovative activities which are strictly linked to
research activity.