Technological Innovation and Exports: Effects on Firm Growth

It has been acknowledged that exporting and innovation activities become key performance drivers of firm growth. In this chapter, using dynamic panel data methodology with a sample of 3267 Spanish manufacturing firms over the period 2004–2014, we explore whether the effect of exports and technological innovation on firm growth differs depending on firm size. Previous research has sometimes overlooked the perils of jointly developing both activities for resource-constrained firms, therefore our study contributes to the literature in this field. Furthermore, a wide set of innovation measures is employed and Spain makes it an interesting context. Our results reveal that process innovation increases firm sales growth regardless of firm size, whereas patents prove to have a positive effect only in large firms. In turn, exporting is positively associated with sales growth in SMEs.