The impact of innovation on export behavior： An empirical analysis of Lao garment firms

Research on the role of innovation as important factor for creating and maintaining competitiveness of nations and firms has long been popularized among scholars and policy makers. The impact of innovation on exporting has been investigated in many countries. However, this issue has paucity of research in the Lao PDR. This study empirically investigates whether or not innovation performed by Lao garment firms determines their exporting behaviors. Utilizing the Probit and Tobit regression to analyze the data from the recent survey of industrial cluster development of Lao garment industry in 2007, the empirical results show that innovation as measured directly by “new product” and “new production process” have positive impact not only on export probability but also export intensity in the case of Lao garment firms. This implies that Lao garment finns who become the innovators have high probability to be exporters. Moreover, among exporters who are innovators outperform non-innovators in terms of export intensity. In addition, this study also finds that Lao garment exporters enjoy more competitive advantage due to lower labor cost. The findings from this study have important policy implications regarding how the government can support Lao garment firms to be innovators in order to sustain export performance.

The impact of innovation on export behavior： An empirical analysis of Lao garment firms

innovation export behavior garment industry Lao PDR