The effects of management innovation on export performance

While scholars have devoted great attention to exploring the link between a firm’s innovation and export activities, most studies have concerned technological innovations, consequently the relationship between non-technological innovations, particularly management innovation, is under-explored. Management innovation is defined as “the invention and implementation of a management practice, process, structure, or technique that is new to the state of the art and is intended to further organizational goals” (Birkinshaw et al., 2008, p.829). The thesis examines the role of management innovation at two distinct phases of export activities, namely, pre-export phase and actual export phase (post-export stage). Building on the link between productivity and exports, the first study argues that management innovation influences a firm’s decision to start exporting through productivity growth and then activating the self-selection mechanism into export markets. The second study concentrates on the post-export phase and develops previously untested premises regarding export survival consequences of different configurations of management innovation. The third study centers on the phenomenon of “learning-by-exporting” and hypothesizes that the introduction of management innovation enables exporters to accrue more benefits after the foreign market entry in terms of technological innovativeness. To empirically examine proposed conjectures and theoretical arguments, this research applies sophisticated statistical and econometric tools allowing for the control of endogeneity that has been widely reported in prior innovation-export research. The significant findings are outlined as follows. Using a comprehensive data set of firms from 55 countries, most of which are emerging and developing economies, this thesis finds that higher productivity of exporters than non–exporters before entering into the export market can be explained by management innovation. Furthermore, by analyzing a unique longitudinal data set of Spanish firms it is observed that implementing management innovation matters to the survivability of firms in the export market only if it is coupled with the introduction of new products and processes. Meanwhile, individual and cumulative forms of management innovation are ineffective in and even unexpectedly harmful to the longevity of export operations. Finally, the empirical analysis of the same Spanish data set shows that the learning-by-exporting effects are considerably greater for exporters introducing management innovation than exporters that do not introduce management innovation.