International Firm Activities and Innovation: Evidence from Knowledge Production Functions for German Firms

Using a knowledge framework and a rich set of plant level data, this study demonstrates that in Germany firms that are active in international markets as exporters or foreign direct investors do generate more new knowledge than firms which sell in the national market only. These differences are not only due to a larger firm size, or different industries, or the use of more researchers in these firms, but due to the fact that these globally engaged firms learn more from external sources too ...