chapter  11
15 Pages

Firms’ internationalisation, innovation strategies and product quality

ByPIERGIUSEPPE MORONE, FRANCESCO RENNA

In this chapter we address the relationship between internationalisation, innovation and quality upgrading for a sample of Italian small and medium sized enterprises (SMEs) within the theoretical framework of innovation theory and ‘new’ new trade theory. Using rm-level data, we develop an econometric model in order to assess the impact of product innovation, quality upgrading (measured both by the ISO9000 certi cation and investments in product quality) and cost saving technical processes on rms’ exports, under the assumption of rms’ heterogeneity. Export behaviour is de ned in a dual way: both as the probability for a rm to export, and as the export turnover of exporting rms. Building upon existing methods, we include in our empirical model various other rm characteristics (skilled labour force, labour productivity and rm age) as well as industry and geographical dummies.