Abstract
Although innovation has been acknowledged as an essential driver of export growth, the empirical results on the linkage between innovation and export propensity are mixed. Using a dataset on innovation at the micro level, we are among the first to examine the effect of different innovation types, namely product, process, marketing, and organizational innovation, on the export likelihood of enterprises in the context of a develo** country—Vietnam. The result reveals a positive relationship between export propensity and all innovation measures, which is supported by instrumental variable (IV) estimations and simultaneous equation systems. Further analysis on such relationship is also conducted across firm’s types of ownership and technology level for more detailed and thorough understandings. The paper confirms the importance of innovation in improving Vietnam’s exports, carrying significant implications for policymakers in develo** countries.
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Appendices
Appendix 1. Measurement of Variables
Variable | Measurement |
|---|---|
Dependent variable | |
Export | 1 if exporter, 0 otherwise |
Innovation variables | |
Product | 1 if firm introduces new or significantly improved products or services, 0 otherwise |
Process | 1 if firm introduces new or significantly improved methods of manufacturing products or offering services, 0 otherwise |
Marketing | 1 if firm introduces new or significantly improved marketing methods, 0 otherwise |
Organization | 1 if firm introduces new or significantly improved organizational structures or management practices, 0 otherwise |
Innovator | 1 if firm introduces at least one of the above-mentioned innovation types |
Firm characteristics | |
Age | Number of years firm operates |
HHI | Herfindahl–Hirschman index (market concentration index) |
Region | 1 if firm is located in Red River Delta, 2 if firm is located in North Central Area and Central Coastal East, 3 if firm is located in South East, 4 if firm is located in Mekong River Delta |
Ownership | 1 if firm is state-owned company, 2 if firm is domestic private company, 3 if firm is foreign-owned company |
Productivity | Firm labor productivity (=total sales/total labor) |
Size | Firm total labor |
Appendix 2. IV Estimation
Product innovation | Process innovation | Marketing innovation | Organization innovation | Innovator | |
|---|---|---|---|---|---|
Product innovation | 1.120** (0.46) | ||||
Process innovation | 1.310*** (0.36) | ||||
Organization innovation | 1.189*** (0.43) | ||||
Marketing innovation | 1.266*** (0.46) | ||||
Innovator | 1.279*** (0.41) | ||||
Productivity (log) | − 0.00513 (0.04) | 0.0170 (0.04) | 0.00230 (0.04) | − 0.0373 (0.05) | 0.0154 (0.04) |
Firm size | 0.295*** (0.08) | 0.282*** (0.07) | 0.278*** (0.07) | 0.313*** (0.07) | 0.285*** (0.08) |
Firm age | − 0.00135 (0.01) | − 0.00308 (0.01) | 0.00138 (0.01) | − 0.00230 (0.01) | − 0.00409 (0.01) |
HHI index | − 0.194 (0.37) | − 0.0582 (0.36) | 0.0755 (0.36) | − 0.0225 (0.36) | − 0.222 (0.37) |
First stage | |||||
Productivity (log) | 0.00106 (0.01) | − 0.00860 (0.01) | − 0.00272 (0.01) | 0.0315** (0.01) | − 0.00768 (0.01) |
Firm size | 0.0344** (0.02) | 0.0363** (0.02) | 0.0543*** (0.01) | 0.00897 (0.01) | 0.0483*** (0.02) |
Firm age | 0.0000112 (0.00) | 0.00162 (0.00) | − 0.00118 (0.00) | 0.0000545 (0.00) | 0.00201 (0.00) |
HHI index | 0.130 (0.11) | − 0.0317 (0.12) | − 0.0810 (0.09) | − 0.0996 (0.11) | 0.0592 (0.12) |
Skilled | − 0.0000223 (0.00) | − 0.0000477** (0.00) | − 0.0000429** (0.00) | − 0.0000190 (0.00) | − 0.0000419* (0.00) |
Education | 0.0000770 (0.00) | − 0.00405* (0.00) | − 0.00125 (0.00) | − 0.000989 (0.00) | − 0.00189 (0.00) |
Trained | − 0.232*** (0.05) | − 0.218*** (0.05) | − 0.240*** (0.04) | − 0.217*** (0.04) | − 0.232*** (0.05) |
/ | |||||
athrho2_1 | − 0.493* (0.28) | − 0.639** (0.25) | − 0.482** (0.20) | − 0.574** (0.27) | − 0.521* (0.27) |
lnsigma2 | − 0.806*** (0.03) | − 0.790*** (0.03) | − 0.998*** (0.03) | − 0.869*** (0.03) | − 0.775*** (0.03) |
Firm type dummy | Yes | Yes | Yes | Yes | Yes |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 587 | 587 | 590 | 586 | 583 |
Appendix 3. Biprobit Estimation
Product innovation | Process innovation | Marketing innovation | Organization innovation | Innovator | |
|---|---|---|---|---|---|
Product innovation | 0.710* (0.41) | ||||
Process innovation | 1.135*** (0.30) | ||||
Organization innovation | 1.098*** (0.37) | ||||
Marketing innovation | 0.963** (0.43) | ||||
Innovator | 1.289*** (0.32) | ||||
Productivity (log) | − 0.00505 (0.05) | 0.0139 (0.04) | 0.00214 (0.04) | − 0.0282 (0.05) | 0.0145 (0.04) |
Firm size | 0.343*** (0.06) | 0.312*** (0.06) | 0.300*** (0.06) | 0.349*** (0.06) | 0.280*** (0.07) |
Firm age | − 0.00167 (0.01) | − 0.00279 (0.01) | 0.00111 (0.01) | − 0.00250 (0.01) | − 0.00372 (0.01) |
HHI index | − 0.120 (0.38) | − 0.0735 (0.37) | 0.0704 (0.37) | − 0.0538 (0.38) | − 0.220 (0.37) |
Skilled | − 0.0000415 (0.00) | − 0.000153* (0.00) | − 0.000197** (0.00) | − 0.0000429 (0.00) | − 0.000109 (0.00) |
Education | 0.00132 (0.01) | − 0.0137* (0.01) | − 0.00502 (0.01) | − 0.00376 (0.01) | − 0.00506 (0.01) |
Trained | − 0.672*** (0.13) | − 0.611*** (0.13) | − 0.795*** (0.14) | − 0.681*** (0.13) | − 0.680*** (0.14) |
Productivity (log) | 0.00621 (0.04) | − 0.0248 (0.04) | − 0.00585 (0.05) | 0.103** (0.04) | − 0.0179 (0.04) |
Firm size | 0.0943** (0.05) | 0.103** (0.05) | 0.230*** (0.05) | 0.0264 (0.05) | 0.139*** (0.05) |
Firm age | − 0.000148 (0.01) | 0.00640 (0.01) | − 0.00261 (0.01) | 0.00123 (0.01) | 0.00542 (0.01) |
HHI index | 0.367 (0.34) | − 0.108 (0.35) | − 0.364 (0.41) | − 0.346 (0.37) | 0.152 (0.34) |
/ | |||||
athrho | − 0.359* (0.28) | − 0.738** (0.29) | − 0.730** (0.32) | − 0.587* (0.35) | − 0.766** (0.36) |
Firm type dummy | Yes | Yes | Yes | Yes | Yes |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 587 | 587 | 590 | 586 | 583 |
Appendix 4. Probit Regressions on Domestic Firm
Model variable | (1) Product innovation | (2) Process innovation | (3) Marketing innovation | (4) Organization innovation | (5) Innovator |
|---|---|---|---|---|---|
Product | 0.203* (0.10) | ||||
Process | 0.110 (0.10) | ||||
Marketing | 0.0303 (0.13) | ||||
Organization | 0.0607 (0.11) | ||||
Innovator | 0.233** (0.10) | ||||
Firm age | − 0.000214 (0.01) | − 0.000894 (0.01) | 0.000226 (0.01) | − 0.000917 (0.01) | − 0.000979 (0.01) |
HHI | − 0.232 (0.31) | − 0.225 (0.31) | − 0.181 (0.31) | − 0.229 (0.31) | − 0.232 (0.31) |
Productivity | − 0.0866** (0.03) | − 0.0822** (0.03) | − 0.0826** (0.03) | − 0.0877** (0.03) | − 0.0836** (0.03) |
Firm size | 0.320*** (0.04) | 0.328*** (0.04) | 0.331*** (0.04) | 0.334*** (0.04) | 0.317*** (0.04) |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 352 | 352 | 354 | 351 | 348 |
Adjusted R2 | 0.1307 | 0.1293 | 0.1285 | 0.1292 | 0.1321 |
Appendix 5. Probit Regressions on FDI Firms
Model variable | (1) Product innovation | (2) Process innovation | (3) Marketing innovation | (4) Organization innovation | (5) Innovator |
|---|---|---|---|---|---|
Product | − 0.314 (0.50) | ||||
Process | − 0.0979 (0.50) | ||||
Marketing | 0 (.) | ||||
Organization | 0.0635 (0.48) | ||||
Innovator | 0.299 (0.42) | ||||
Firm age | − 0.0194 (0.04) | − 0.0147 (0.04) | − 0.0325 (0.05) | − 0.0152 (0.04) | − 0.0150 (0.04) |
HHI | 0.808 (1.24) | 0.727 (1.21) | 1.031 (1.26) | 0.693 (1.21) | 0.667 (1.21) |
Productivity | − 0.281 (0.17) | − 0.296* (0.17) | − 0.249 (0.19) | − 0.306* (0.17) | − 0.305* (0.17) |
Firm size | 0.382** (0.19) | 0.343** (0.18) | 0.404** (0.19) | 0.348** (0.18) | 0.345* (0.18) |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 64 | 64 | 57 | 64 | 64 |
Adjusted R2 | 0.1591 | 0.1545 | 0.1678 | 0.1542 | 0.1608 |
Appendix 6. Probit Regressions on Low-Tech Firms
Model variable | (1) Product innovation | (2) Process innovation | (3) Marketing innovation | (4) Organization innovation | (5) Innovator |
|---|---|---|---|---|---|
Product | 0.0844 (0.18) | ||||
Process | 0.120 (0.17) | ||||
Marketing | 0.0155 (0.21) | ||||
Organization | 0.0805 (0.19) | ||||
Innovator | 0.348** (0.17) | ||||
Firm age | − 0.00517 (0.01) | − 0.00422 (0.01) | − 0.00434 (0.01) | − 0.00599 (0.01) | − 0.00522 (0.01) |
HHI | 0.153 (0.70) | 0.171 (0.69) | 0.142 (0.69) | 0.173 (0.69) | − 0.0207 (0.70) |
Productivity | 0.0309 (0.06) | 0.0327 (0.06) | 0.0422 (0.06) | 0.0270 (0.06) | 0.0303 (0.06) |
Firm size | 0.409*** (0.06) | 0.415*** (0.06) | 0.411*** (0.06) | 0.412*** (0.06) | 0.405*** (0.06) |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Ownership dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 352 | 352 | 354 | 351 | 348 |
Adjusted R2 | 0.2127 | 0.2173 | 0.2107 | 0.2135 | 0.2251 |
Appendix 7. Probit Regressions on High-Tech Firms
Model variable | (1) Product innovation | (2) Process innovation | (3) Marketing innovation | (4) Organization innovation | (5) Innovator |
|---|---|---|---|---|---|
Product | 0.158 (0.18) | ||||
Process | 0.0830 (0.18) | ||||
Marketing | 0.0158 (0.22) | ||||
Organization | 0.00554 (0.20) | ||||
Innovator | 0.119 (0.19) | ||||
Firm age | − 0.00415 (0.01) | − 0.00667 (0.01) | − 0.00414 (0.01) | − 0.00658 (0.01) | − 0.00674 (0.01) |
HHI | − 0.0396 (0.41) | − 0.167 (0.43) | − 0.0298 (0.41) | − 0.152 (0.43) | − 0.158 (0.43) |
Productivity | − 0.0378 (0.07) | − 0.0264 (0.07) | − 0.0445 (0.07) | − 0.0306 (0.07) | − 0.0264 (0.07) |
Firm size | 0.330*** (0.07) | 0.349*** (0.07) | 0.342*** (0.07) | 0.352*** (0.07) | 0.342*** (0.07) |
Region dummy | Yes | Yes | Yes | Yes | Yes |
Ownership dummy | Yes | Yes | Yes | Yes | Yes |
Observations | 313 | 313 | 314 | 312 | 311 |
Adjusted R2 | 0.1828 | 0.1877 | 0.1811 | 0.1867 | 0.1874 |
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Nguyen, M.N., Le, T.V., Le, H.T.T. (2024). Does Innovation Enhance the Export Propensity of Vietnamese Firms?. In: Tran, H.V.T., Shioji, H., Le, H.L.T., Hayashi, T. (eds) Knowledge Transformation and Innovation in Global Society. Springer, Singapore. https://doi.org/10.1007/978-981-99-7301-9_4
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