ABSTRACT
The aim of this paper was to gauge whether innovation effort positively affects the probability of exporting for manufacturing companies in Mercosur countries: Argentina, Brazil, Paraguay and Uruguay. To this end, three econometric models of dichotomous response were applied to cross-sectional data: probit; bivariate probit, to correct the problem of endogeneity; and the Heckman selection model, for the correction of sample selection bias. We used firm-level data from the World Bank’s Enterprise Surveys database. The results showed that innovation positively affects the likelihood of companies in Argentina, Brazil and Uruguay becoming exporters. Furthermore, the use of imported input is another significant variable that increases the probability of exporting from these three countries. The estimates of the Heckman selection model proved to be inadequate (no selection bias) for all the countries in the sample except Argentina.
Keywords:
Exports; Innovation; Productivity; Mercosur