This paper examines the causal effect of innovation on firm-level export performance in
Uganda using World Bank Enterprise Survey and Innovation Survey data (n=762). To
address endogeneity between innovation and export decisions, we employ instrumental
variable strategies exploiting exogenous variation in innovation driven by (i) access to
information sources, (ii) national innovation system support, and (iii) perceived obstacles
to innovation. Two-stage least squares (2SLS) estimates reveal that innovation increases
export share by 3.1 to 11.3 percentage points, with process innovation exhibiting stronger
effects than product innovation. The impact is particularly pronounced in services (9.8 pp)
compared to manufacturing (5.4 pp). Firms hindered from innovating due to financial
constraints or informal sector competition exhibit export shares 8.5 percentage points
lower. Policy simulations suggest that improving access to innovation information could
raise innovation propensity by 35.7 percentage points, highlighting the critical role of
national innovation systems in boosting intra-regional trade within COMESA.