Export status and SME productivity: Learning-to-export versus learning-by-exporting

Abstract

We examine the strategic (pre-) exporting choices of UK micro, small and medium enterprises (SMEs) and their links to productivity. This involves considering not only exporters and non-exporters, but also an intermediate category of export-capable firms. Such categorisations help to identify learning effects occurring in the pre- and post-export phases. Indeed, we find evidence of both learning-to-export and learning-by-exporting effects among SMEs, and that firms consciously select their export status based on current productivity performance. Innovation plays a key role, and its effect does not occur exclusively in the transition to exporting, but also in building up export capability. Product and process innovation have different effects on export capability and exporting, respectively. The effect of product innovation on productivity is negative at least in the short-term. Growth ambition and planned future innovation are key determinants of both export capability and exporting.