Learning from Foreign Markets and Domestic Innovation

Abstract

　　This paper examines how internationalization impacts firm performance, with a focus on exporting and domestic innovation. Japanese firms have actively engaged in importing, exporting, and expanding overseas production for decades. Although the manufacturing sector has seen overall productivity gains due to internationalization, this internationalization has not significantly boosted domestic production and exports. The paper suggests that weak connections between internationalization and innovation might be a factor. By analyzing previous studies, it emphasizes the importance of learning from international partners to boost domestic innovation and outlines research questions on fostering a robust virtuous cycle between internationalization and innovation.

JEL classification:F14;F23;L25;O31;O33