{"id":401,"date":"2026-04-27T11:03:40","date_gmt":"2026-04-27T10:03:40","guid":{"rendered":"https:\/\/www.farhi-innovation-lab.fr\/?post_type=publication&#038;p=401"},"modified":"2026-04-27T14:12:21","modified_gmt":"2026-04-27T13:12:21","slug":"the-heterogeneous-impact-of-market-size-on-innovation-evidence-from-french-firm-level-exports","status":"publish","type":"publication","link":"https:\/\/www.farhi-innovation-lab.fr\/fr\/publication\/the-heterogeneous-impact-of-market-size-on-innovation-evidence-from-french-firm-level-exports\/","title":{"rendered":"The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports"},"content":{"rendered":"<p class=\"wp-block-paragraph\">We analyze how demand conditions faced by a firm in its export markets affect its innovation decisions. We exploit exogenous firm-level export demand shocks and find that firms respond by patenting more; furthermore, this response is driven by the subset of initially more productive firms. The patent response arises two to five years after the shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms regardless of their productivity. This skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity.<\/p>","protected":false},"excerpt":{"rendered":"<p>We analyze how demand conditions faced by a firm in its export markets affect its innovation decisions. We exploit exogenous firm-level export demand shocks and find that firms respond by patenting more; furthermore, this response is driven by the subset of initially more productive firms. The patent response arises two to five years after the [&hellip;]<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":true},"thematique":[47,76,79],"type-de-publication":[50],"class_list":["post-401","publication","type-publication","status-publish","hentry","thematique-innovation","thematique-productivity","thematique-trade","type-de-publication-publication"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports - Farhi Innovation Lab<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports - Farhi Innovation Lab\" \/>\n<meta property=\"og:description\" content=\"We analyze how demand conditions faced by a firm in its export markets affect its innovation decisions. We exploit exogenous firm-level export demand shocks and find that firms respond by patenting more; furthermore, this response is driven by the subset of initially more productive firms. 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