Abstract
This study investigates firm characteristic determinants of export intensity in small firms. The originality of our approach is a comparative analysis of export intensity between firms in the computer software and manufacturing sectors, using a quasi-maximum likelihood estimation to test for the correct specification of the conditional mean model. Results indicate that larger, younger firms have greater export intensity in the computer software sector than in manufacturing. Research and development expenditure is equally important for export intensity in both sectors, but patent income is not significant. Sourcing managerial advice and expertise from the national development agency is important for firms in the manufacturing industry, but not for computer software firms. It is therefore important for export promotion organisations to publicise supports, as few small firms are aware of their availability. Our findings are especially valuable for policy makers concerned with low levels of export intensity among small firms.
Highlights
Establishing a presence in international markets through exporting goods and services is important for the growth and sustained development of small and medium sized enterprises (SMEs) (Westhead et al 2001)
On the balance of evidence we propose that: H4: Export intensity is positively related with receipt of managerial advice from a national development agency, and this relationship is of greater magnitude for manufacturing firms than firms in the computer software sector
Internationalisation is established longer in the manufacturing sector, as the Irish industrial landscape is influenced by an economic development policy of pursuing Foreign Direct Investment (FDI), which initially focussed on attracting manufacturing plants (Ó Gráda 1997)
Summary
Establishing a presence in international markets through exporting goods and services is important for the growth and sustained development of small and medium sized enterprises (SMEs) (Westhead et al 2001). The importance of indigenous exporting SMEs for employment is even more significant, as they account for 23.5% of employment in the manufacturing sector, which is double that of foreign exporting SMEs (Lawless et al 2014). Investment from international services is increasing in importance, and this sector accounts for 50% of exports (Central Statistics Office 2013a). Whilst this growth can be largely attributed to foreign multinationals, there have been important overflows to indigenous entrepreneurship, in the computer software sector (Acs et al 2007). Whilst a large proportion of these exports are accounted for by multinational firms, a substantial indigenous industry has emerged in parallel (Barry, Van Egeraat 2008)
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