Export Behaviour and Propensity to Innovate in a Developing Country: The Case of Tunisia

Abstract

The relation between export behaviour and the propensity to innovate is an important question for a developing economy. This article dedicated to this question through the analysis of the first innovation survey of Tunisian firms. We analyze the relationship between the export behaviour and the innovation propensity of the firms as it can be qualified using econometric estimations (mainly probit models) and non-parametrical regression trees on the results of the first community innovation survey in Tunisia. Our results show that firms that address both the domestic and foreign demands (partial- exporters) have the highest propensity to innovate, and they better benefit from external knowledge sources, as well as a diversified demand. We find that external knowledge sources, internal R&D efforts and some types of cooperative agreements are complementary for product innovations, but the first play an essential role, in the sense that firms must benefit from at least one external knowledge source to attain a significant innovation propensity. We show that innovation behaviour of three subsets of firms are strongly contrasted: pure exporters who only address the foreign demand, pure domestic firms, and partial exporters.Innovation; exports; openness; development; absorptive capacity