The effects of innovation on export of the small and medium-sized enterprises: The case of Viet Nam

Export has played an important role for firms in the context of globalization. However, firms, particularly small and medium-sized enterprises (SMEs) in developing countries, have faced many barriers to export; one of the major barriers is their less competitive products. This study aimed to examine the effects of innovation on the SMEs’ decisions to export in Vietnam. To examine this relationship, this study used the dataset from the SMEs surveys in 2011, 2013 and 2015. In addition, the probit model was used to estimate the relationship between the variables in the research model. The probit’s estimates revealed that innovation has a positive and statistically significant effect on the SMEs’ decisions to export and direct export. However, the marginal effect results showed that the effects of innovation on decisions to export and direct export were negligible. The results from this study provided policymakers and firm managers with empirical evidence on the role of innovation in promoting export. Thenceforth, this research proposed policy and managerial implications for promoting the effectiveness of innovation and export in SMEs.