Learning-by-exporting: The strategic role of organizational innovation

Abstract

Drawing on organizational learning theory, this study examines the strategic role of organizational innovation in learning to innovate by exporting, commonly known as ‘learning-by-exporting’ (LBE). We explain that mere knowledge access is distinct from the enactment of knowledge, and this matters for LBE. Despite growing interest in how firms enhance product innovation performance through exporting and thus, LBE, previous literature has remained silent on the role played by strategically induced changes to organizational routines when learning. We hypothesize that some exporters will introduce organizational innovations – aimed at changing internal practices and routines – which then allows them to enact new knowledge and enhance innovation performance following engagement in export markets. We study our hypotheses, using panel data of 1489 medium-sized manufacturing firms taken from the Mannheim Innovation Panel, the German contribution to the Community Innovation Survey (CIS). We find LBE effects solely amongst firms which adopted organizational innovations during the studied period. Further, our findings revealed that the extent and type of organizational innovation markedly influences LBE. Our study uses a novel context to explain that it is the presence and extent of organizational innovations which influence firms’ abilities to enhance product innovation performance following international engagement through exports.