Abstract
AbstractIncreased export experience on the board of nonexporting firms has a causal effect on their propensity to enter foreign markets in later periods. Using a universal set of Swedish employer–employee panel data for the period 2000–14, this paper finds evidence on spillover from exporters to non‐exporting SMEs through outside board directors. The identification strategy to account for endogenous selection of external board members relies on external instruments and applications of different instrumental variable approaches, capturing also unobserved heterogeneity. Our findings are robust to controlling for export background among managers and employees, as well as firm size, human capital, total factor productivity, productivity spillovers, firm location and industry classification.
Highlights
What hinders corporate involvement in international markets? This issue has received large attention among scholars from various research areas over past decades
The first is to control for factors that previous literature has found to be associated with propensity to export, as well as some new factors. These are the productivity of the focal firm, which we measure as total factor productivity (TFP), the productivity of the other firms where the outside directors are employed as managers or workers or serving the board, and prior export experience of the focal firm’s management and workers, including inside board members
Main results estimating the impact of increased export experience of the board of directors are reported in Tables 5.1 - 5.4
Summary
What hinders corporate involvement in international markets? This issue has received large attention among scholars from various research areas over past decades. The measure on export spillover in this paper is constructed by information on the export performance of the firm where outside directors are employed as managers or workers, or appointed directors on the board (interlocked). The first is to control for factors that previous literature has found to be associated with propensity to export, as well as some new factors These are the productivity of the focal firm, which we measure as total factor productivity (TFP), the productivity of the other firms where the outside directors are employed as managers or workers or serving the board, and prior export experience of the focal firm’s management and workers, including inside board members. Our study, controlling for these factors, shows that outside members of the board of directors from export intensive companies are an important channel for export spillovers.
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