ICT, INNOVATION AND SME EXPORT LIKELIHOOD: EVIDENCE FROM SMEs IN THE ASEAN ECONOMIES

Abstract

This study examines the impact of information and communication technologies (ICTs) and innovation on small and medium enterprises (SMEs) export likelihood using a two-stage instrumental variable logistic estimator in 6,844 ASEAN SMEs. Adopting ICT technologies allows SMEs to overcome the constraints faced when exporting, while innovation allows SMEs to gain a competitive advantage. Meanwhile, the ASEAN economies are committed toward regional integration and have implemented policies to develop the SME and ICT sector. Results indicate that both ICT technologies and innovation contribute positively to export likelihood, albeit the magnitude of ICT technologies on export likelihood is greater. Furthermore, the results show that ICT technologies can overcome the constraints faced by marginalized businesses in terms of exporting, and can also enhance export likelihood in the manufacturing industry. Policy implications are discussed.