Carlo Altomonte, Tommaso Aquilante, Gábor Békés, Gianmarco Ottaviano, 21 March 2014

Internationalisation and innovation policies are frequently considered to be key drivers of growth. This column documents a strong positive association between internationalisation, innovation, and productivity at the firm-level across seven European countries. This association continues to hold after controlling for country, size, industrial sector, and firm specific characteristics, with some evidence of causality running from innovation to internationalisation. The analysis suggests that policymakers should coordinate, if not integrate, innovation and internationalisation policies in order to boost productivity and growth.

Thierry Mayer, Gianmarco Ottaviano, 07 November 2007

Across several European countries there is a striking consistency in the finding that the firms involved in international activities are few in number, bigger and more productive than other firms. This scarcity is the single most important constraint on European performance in trade and FDI.