What drives export performance of firms in Eastern and Western Poland?

Abstract

ABSTRACTWe use a unique firm-level survey dataset that draws from the EFIGE (European Firms in a Global Economy) questionnaire to unveil differences in factors driving export performance in the most structurally diverse areas of Poland. While conventional results regarding the role of size, foreign ownership and innovation activity are confirmed at the aggregate level, the picture breaks down when Western and Eastern macroregions are extracted. Our results suggest that the common perception of a more developed West (Poland ‘A’) and a backward East (Poland ‘B’) might be outdated. Rather, firms in both regions seem to follow distinct strategies for and have dissimilar success factors in competing internationally. Interestingly, export performance in the East is found to benefit from family ties in business, but also from product innovation and non-price competitiveness. In the West, it is associated mostly with size and foreign ownership. Overall, our results, on the one hand, add support to the ‘new’ new trade theory and the ‘new’ new economic geography’s premises related to the importance of microeconomic factors and, on the other, contribute to the discussion on the pattern of regional development in Poland. We also discuss some implications for policymakers and managers and suggest directions for further research.