How Does Technology Import and Export Affect the Innovative Performance of Firms? From the Perspective of Emerging Markets Firms

As economic globalization develops greatly in recent years, emerging market firms (EMFs) increasingly grasp the opportunity of cross-border learning to develop and improve their technology capability through learning by exporting (LBE) and learning by technology importing (LBTI). Although LBE and LBTI have been supported by extensive literature, it still is not clear what and how EMFs learn through LBE and LBTI. In this study, we highlight the role of human agency by examining how perceived competitive threat from informal firms determines EMFs relative preference for product innovation and process innovation. Based on a World Bank dataset on Chinese manufacturing firms during 2009-2011, this study finds firms facing high (vs. low) perceived informal competition which may devote relatively more attention to product innovation than to process innovation after entering into export markets, whereas firms facing high perceived informal competition may pay more attention to process innovation in process of learning by technology import. This study is the first to focus on the effect of informal sector firms on cross-border learning.