The development of information technologies and the reduction of trade barriers have fostered the international fragmentation of production and the expansion of knowledge networks. Globalization has stimulated an unprecedented economic growth across the globe, shifting the balance in the world economy, with a decline of developed countries and the rise of emerging economies. The response of rms in mature economies to global competition is an increased engagement in internationalization and innovation strategies. In this thesis we investigate rst how trade protectionism might not be an e cient instrument to prevent the negative e ects of international competition, nding mixed e ect of EU anti-dumping measures on Chinese products, with temporary bene t for domestic producers, but a negative impact on importers and long-run perverse e ect on productivity. Second, we analyse the role of innovation in fostering the international performance of rms. Our results show that R&D investment, innovation and outsourced R&D improve the export performance of European rms, exporting more products and accessing new and more di cult foreign markets. Only by investing in innovation European rms will be able to positively internalise the externalities linked to globalization, increasing human capital and the stock of knowledge, boosting productivity and creating new value-added jobs.