ABSTRACT
This chapter is intended to provide empirical evidence on the relationship between technological innovation and international trade using firm-level panel data in Egypt to study the dynamics of the relationship between participation in international trade markets and absorptive capacity. In order to do so, we take the technological innovation process as absorptive capacity and consider two facets of technological innovation: creation and absorption. Our results show that both creative and absorptive capacity has an important effect on the decision to trade in developing countries.
