Export Propensity of Estonian and Slovenian Manufacturing Firms : Does Foreign Ownership Matter?

Abstract

This article discusses the determinants of export propensity of foreign firms in Estonian and Slovenian manufacturing sectors relative to domestic firms. We show that differences in export propensity between foreign and domestic firms in Slovenia and Estonia are significant and that they are due to structural differences between foreign and domestic firms which are reflected in: (1) different efficiency of factors utilization and productivity level, and (2) differences in other operational characteristics, which determine productivity and export propensity. Superior export propensity of foreign firms is partly due to the factor of "foreign ownership" itself, which also embraces the effect of multinationality.