Export Intensity Research Articles

An Analysis of India’s Exports of Services: 2010 – 2020

The Indian economy has witnessed significant increase in exports of services in the recent years. The present study analyses the trends, competitiveness and direction of India’s services exports for the period 2010 to 2020. It can be inferred that the exports of two services, viz.; telecommunications, computer and information services and other business services dominate the services exports. The impetus mainly comes from computer services and professional management and consultancy services. Similarly, the comparative advantage for India also lies in the export of telecommunications, computer and information services and other business services. Furthermore, it has been found that the intensity of exports of these two services is more to emerging economies from East Africa and South Asia. The analysis points out that the Indian economy has been emerging as one the major services provider from the Global South in the recent years.

Export intensity and its effect on women's employment

AbstractUsing firm‐level survey data for 29,962 manufacturing firms in 141 developing and emerging countries, the impact of exports (as a percentage of sales) on the share of female workers at the firm is estimated. The impact is positive, large, and statistically significant. For the baseline specification, moving from a firm that does not export to one that does all its sales abroad is associated with a 6.6 percentage point increase in the share of female workers. This positive relationship is much stronger when competition in the domestic markets is low, social attitudes and mobility laws are more favorable to women's work outside the home, and the law‐and‐order situation is better. We argue that these heterogeneities serve as important checks against endogeneity concerns. We also provide results using the average share of exports in a country–industry cell as an instrument. The policy implications of our findings are discussed in detail.

The catalyzing role of customer pressure on environmental initiatives and export intensity: A study of family firms

Predominantly, firms’ adoption of environmental initiatives has been driven by regulatory and economic incentives. Yet, recognizing mounting evidence that family firms demonstrate superior environmental proactivity, it is likely that other drivers also inspire their environmentalism. To assess this possibility, an integrated stakeholder, institutional and resource-based perspective is espoused. Thus, this inquiry assesses how environmental pressure from customers stimulates environmental initiatives and the extent to which this constitution would boost export intensity. Based on 620 observations of Turkish family firms, a robust path analysis procedure revealed that customer pressure positively increases the adoption of environmental planning and energy management. In turn, these instruments work in concert to reduce environmental regulatory obstacles and enhance export intensity, with environmental planning playing a key role. Theoretically, customer pressure is introduced as a fresh antecedent. Practically, family firms in Turkey can grasp the virtuous knock-on effect of acceding to the environmental pressure exerted by customers.

The Relationship of R&D and Export Intensity with Financial Performance: The Case of Türkiye's Top 500 Industrial Enterprises

Çalışmada Türkiye’nin 500 büyük sanayi kuruluşunun AR-GE ve ihracat yoğunluğu ile finansal performansı arasındaki ilişki incelenmektedir. Ayrıca, ihracat yoğunluğunun AR-GE ile finansal performans ilişkisine etkisi de irdelenmektedir. 2012–2020 yılları arasında İSO 500 şirketleri sıralamasına giren ve AR-GE harcaması yapan 171 firma panel veri modelleriyle analiz yapılmıştır. Analiz sonuçları, şirketlerin AR-GE yoğunluğunun finansal performanslarını başlangıçta negatif etkilediğini ve bu etkinin AR-GE yoğunluğunun belirli bir seviyeye gelmesiyle de pozitife döndüğünü göstermektedir. Ayrıca ihracat yoğunluğunun, firmaların finansal performansları üzerinde anlamlı bir etkisinin olmadığı sonucuna da ulaşılmıştır. Yüksek teknolojili şirketlerde, AR-GE yoğunluğuyla finansal performans ilişkisi kısa vadede negatifken, AR-GE yoğunluğu belirli bir seviyeye ulaştığında bu ilişki pozitife dönmektedir. Düşük teknolojili şirketlerde ise bu değişkenler arasında herhangi bir ilişki bulunamamıştır.

Subjective status perception of entrepreneurs and firm-level international behavior: evidence from Chinese private firms

Purpose The purpose of this paper is to explore the determinants of entrepreneurs’ subjective social status perception (SSP) on firm international behaviors based on the upper echelons theory and social class theory. Design/methodology/approach To test the hypotheses, the authors studied a large sample of 10,823 small- and medium-sized private Chinese enterprises from 2006 to 2014. Findings The results showed that entrepreneurs with higher status perception prefer international activity and firms have higher export intensity and intention. In addition, the social capital of entrepreneurs and institutional environment amplifies the positive relationship between SSP and international behavior. Originality/value This paper contributes to research on the upper echelon of management and extends our understanding of how managerial social characteristics influence international strategic decision-making. Besides, it also contributes to the emerging stream of social status research in international expansion studies and expand researchers’ limited understanding of the effects of social status in business settings.

How Much Does Domestic Location Matter for B2B Firms’ Export Intensity? A Variance Decomposition Study

Business-to-business (B2B) firms leverage the advantages of their domestic location to export goods and services. However, little empirical research has examined the extent to which domestic location effects explain variation in B2B firms’ export intensity, despite their potentially critical role. In this study, the authors explore this question with a variance decomposition analysis, an approach that allows them to quantitatively examine the relative contribution of domestic location and other effects on B2B firms’ export intensity. Their analysis uses a large longitudinal sample of 7,465 European B2B firms over 15 years (2004–2018). Splitting domestic location effects into the home country and subnational region (a geographic space within a country) effects, they find that each explains a substantial portion of the variation in export intensity. Notably, the results show that the examined effects are more critical for small and medium-sized enterprises than for larger B2B firms. Domestic location factors also matter more for B2B manufacturing firms than for B2B service firms. The findings enhance scholarly and managerial understanding of the application and predictive power of domestic location effects in explaining firm internationalization through exports.

Export Spillovers from Foreign Direct Investment in Kenya's Manufacturing Sector: A Double Hurdle Approach

ABSTRACT: This paper investigates export spillovers from foreign direct investment on the exporting activities of domestic manufacturing firms in Kenya. Specifically, the paper aims at identifying the transmission channels through which foreign direct investment affects the export propensity and export intensity decisions of domestically-owned firms. The study also examines the importance of firm-level heterogeneity on the occurrence and behavior of spillover channels. The study uses a panel data set for manufacturing firms in Kenya, obtained from the World Bank Enterprise Surveys, conducted in three waves covering the period 2007–2018. Employing the Double-Hurdle model approach, and using the maximum likelihood estimation technique, we empirically demonstrate the relevance and significance of distinguishing three channels for intra-industry (horizontal) spillovers – demonstration effects, information effects and competition effects channels and one channel for vertical spillovers, that is, backward linkage channel. Findings of this study shows that domestically-owned firms in Kenya experience significant positive export spillovers on their export participation decisions through the demonstration effects channel and significant negative spillovers via the competition effects channel. The findings also show significant positive export spillover effects on the export intensity decisions of domestically-owned firms via information and competition effects channels and significant negative export spillover effects via the backward linkages channel. The results further provide evidence that firms belonging to industries with low technological levels were unable to absorb spillover benefits from foreign presence via the demonstration effects channel. The results also indicate that small and medium firms were unable to reap export spillovers benefits via information effects and backward linkage channels. The findings have important policy implications for managers of firms and policymakers in Kenya and other developing countries. To enhance export-related spillover benefits, domestic firms need to enhance their absorptive capacities by upgrading their technical capacities and improving quality standards. Governments should facilitate the exchange of information on investor needs, their capacities and skills requirements, thus bridging information gaps between domestic suppliers and foreign investors in addition to supporting domestic market linkages.

Energy transition risk for Australia’s LNG: how to build up resilience for a low-carbon future

Global gas demand is expected to surge 12.5% in the next 8 years, from about 4 trillion cubic meters (Tcm) this year to around 4.5 Tcm in 2030. Demand in the Asia Pacific region is expected to soar about 30% by 2030. Many countries, particularly in the European Union (EU), will look to diversify away from Russian gas supplies in the wake of Russia’s invasion of Ukraine. Liquified natural gas (LNG) is set to play a major role in plugging some of this supply gap – compared to 2021 levels, Europe’s LNG demand increased 60% to 123 million tonnes in 2022. There is no doubt that LNG suppliers with the lowest costs and emissions will stay in demand for longer, as buyers everywhere are not only looking for the cheapest volumes but also for supply with the lowest carbon footprint. In this paper, Rystad Energy benchmarks the carbon intensity of LNG exports from Australia to major Asian markets against other exporters to see how carbon-competitive Australia’s LNG is across the entire value chain: from upstream to regasification. We also take a closer look at specific LNG projects and estimate how much of the value might be at risk due to lower commodity prices and CO2 cost adoption. This type of analysis breaks down the complexity of energy transition risk for the Australian LNG market, allowing companies to implement risk mitigation plans at the earlier stages of the market’s evolution towards a low-carbon future.

On the Direct and Indirect Effects of ICT on SMEs Export Performance: Evidence from Colombian Manufacturing

AbstractThe objective of this research is to investigate the effect of ICT on the performance of Colombian manufacturing SMEs in export markets. In doing so, we explore the direct effect of ICT on exports and propose a new indirect effect that operates through imports: purchasing foreign intermediates incentivise ICT use, and ICT experience on imports exerts a positive impact on exports. To perform our empirical analysis, we estimate a dynamic generalised linear model (GLM) that accounts for the fact that export intensity is a proportion and corrects for sample selection. The dataset we use is the result of merging three databases: the Annual Manufacturing Survey (EAM); the Innovation and Technological Development Survey (EDIT), and the Annual ICT Manufacturing Survey (EAM-TIC), published by the National Administrative Department of Statistics (DANE) in six waves since 2013 to 2018. Our main results uncover that the impacts of different ICT components on export intensity are always positive (direct effect). Further, there is also evidence that previous experience in ICT use on import activity affects the firm’s current export performance (indirect effect). Other results show persistence in export performance or self-selection to continue exporting, among others.

Examining the (non)symmetric environmental quality effect of material productivity and environmental-related technologies in Iceland

This study considers the carbon neutrality 2040 ambition of Iceland to examine the role of raw material productivity, environmental-related technologies, and export intensity (components of the 48 elements of the country’s Climate Action Plan (CAP)) in navigating the country's environmental sustainability pathway. By employing symmetric and asymmetric empirical approaches with dataset that span over 1990–2019, the result reveals that a positive shock to raw material productivity accounts for a decline in GHG emission in both short- and long-run, thus aiding the pathway toward green productivity in the country. While GHG emission is impacted negatively by a positive shock in environmental-related technologies, the finding reveals a surge in GHG emission arising from a negative shock in environmental-related technologies in all the examined models. However, it is revealed that a positive shock to GDP spurs GHG emissions especially in the long run while a negative change in GDP impact hinders the surge in GHG emissions. This evidence poses more question about the country’s pathway to sustainable growth. Interestingly, the result further posits that a positive shock to export intensity enhances environmental sustainability by promoting a decrease in GHG emissions. Meanwhile, a negative shock to export intensification shows a contrary effect. In a compelling manner, the results of the symmetric analysis corroborate the above-mentioned asymmetric evidence. Thus, the result from this investigation brings the Icelandic’s CAP performance under scrutiny alongside offering further recommendation to attaining improved performance.

Do imports and exports exacerbate employment volatility? Evidence from Chinese A-share-listed industrial enterprises

ABSTRACT To build a new development pattern in China, it is important to study the impact of import and export trade on its employment. We measured employment volatility and empirically analysed the impact of trade status and import and export intensity on the employment volatility of labour requiring different skill levels in A-share-listed industrial enterprises from 2003 to 2015. We found that firms engaging in import and export trade can significantly reduce employment volatility for both high- and low-skilled labour. Furthermore, differences were noted in the degree of impact on the two skill levels. The results indicate that an increase in export intensity does not reduce employment volatility in high-skilled labour. However, an increase in import intensity significantly reduces employment volatility in both high- and low-skilled labour. Moreover, export and import trade reduce employment volatility by reducing the volatility in firms’ output and wages and by promoting investment in research and development.

The Role of Innovation in the Economic Development of the Eastern Regions of the Russian Federation: Economic and Statistical Analysis

The article evaluates an innovative component of economic growth in the eastern regions of the Russian Federation using statistical analysis methods. The relevance of the matter under consideration is increasing dramatically due to the introduction of economic sanctions against Russia, which significantly restrict the import of high-tech and innovative products into our country. Based on Rosstat data for 2016–2019, a comparative analysis of the development of several areas of innovation and economic activity in the regions of the Russian Federation as part of the Far East Federal District (Far East – FE) and the Baikal Region (BR) was carried out. According to the authors, currently, in the regions under consideration, there is an imbalance in the individual components of the innovation sphere, significant heterogeneity, and uneven development of innovation and technological processes in general. The effectiveness of innovation activity in the regions under review in comparison with the indicators for Russia as a whole is low. The revealed multidirectional dynamics of innovation activity indicators in the regions and the lag of most of them from the average Russian level are connected, in the authors’ opinion, with the problems of organizational and financial support of innovation activity and insufficient budget funding allocated to stimulate it. Innovations in the FE and the BR regions were carried out mainly at the expense of the organizations' own funds. In the structure of their costs, most of the funds were allocated for the purchase of machinery and equipment, in 2019 the share of research and development costs significantly increased. The export of innovative products was carried out in less than half of the considered group of regions. The intensity of exports of innovative products in the economy as a whole, as well as in the field of industrial production, exceeds the national level and accounts for about half or more of the total export volume. In terms of the effectiveness of innovation activity among the analyzed regions, the Khabarovsk Territory is the undisputed leader, and among the outsiders are the Magadan Region and the Kamchatka Territory in 2016, the Trans-Baikal Territory in 2019. In most regions, there is an increase in the raw materials orientation of economic systems, and a decrease in the share of the manufacturing sector in the gross regional product (GRP). The results of the analysis of the role of innovation activity in the economic development of the eastern regions of the country and interregional comparative statistics, according to the authors, can be used in the development of updated and upgraded programs for the socio-economic development of the subjects of the FE and the BR of the Russian Federation, concerning present-day foreign policy and foreign economic realities.

Evaluating current effects of upcoming EU Carbon Border Adjustment Mechanism: Evidence from China's futures market

The European Union Carbon Border Adjustment Mechanism (EU CBAM) has already generated concerns worldwide. In this study, we investigate the reactions of the energy-intensive industries to legislative announcement of the EU CBAM. We employ the event study method to empirically examine the existence of the green paradox based on the steel and aluminum data from China's futures market. The empirical results provide strong evidence of a significant decrease in returns for steel rebar and aluminum futures. However, there exists a stronger effect on aluminum futures than steel rebar due to the higher export intensity and carbon emission of aluminum products. Theoretically, the responses from energy-intensive industries appear to be driven by three potential channels (production, storage, and consumption), but our empirical results suggest that only producers respond to the EU CBAM event. Moreover, we also find that the CBAM event subsidized aluminum's carbon dioxide emissions by around 24 RMB per metric ton by quantifying the effect size of the event on the futures prices. We recommend that policymakers shorten the implementation lag of climate policies and limit the potential for new production capacity to be added.

Political economy of real exchange rate levels

Voluminous theoretical and empirical research shows that real exchange rate (RER) undervaluation could be conducive to economic development. Why do countries then often avoid the pursuit of policies that facilitate undervaluation or even intentionally pursue RER overvaluation? We address this question by investigating economic, institutional, and policy factors that help explain the within-country variation in RER undervaluation in a baseline panel of 68 developing and 39 developed countries between 1989–2013 using OLS and GMM estimators. Our results indicate that increases in the share of non-tradable sector output, imported input intensity of exports, and capital account openness is systematically associated with less undervalued RERs. We also provide evidence that independent central banks and democratic institutions are linked to RER overvaluation. Our key findings are robust to using alternative specifications, measures, estimation techniques, samples, and additional control variables. A preliminary comparison of Latin America and East Asia suggests interesting support for our key findings.

Exporting decision of agricultural firms: The role of foreign direct investment

AbstractIn this study, we examine how foreign direct investment affects agricultural firms' exporting decisions. We investigate this by using a Tobit model of export intensity, estimated on the sample of 104 Serbian agricultural firms observed in the period 2014–2017. In particular, we considered both direct and indirect export effects of foreign direct investment. The results indicate that foreign ownership positively affects firms' export intensity. Furthermore, we find that the effect is conditional on the origin of foreign capital, the strongest effects being associated with capital coming from bordering countries. Finally, the results show that the indirect effects of foreign direct investment on export are mainly negative. The results imply that agricultural firms which are a part of the system of multinational enterprises have lower costs of exporting, due to their reliance on international distribution networks and the information on foreign markets provided by the parent companies. In contrast, the costs of production for the local firms could be increased due to the intensive competition by the foreign affiliates. This means that foreign direct investment has the potential to improve the export performances of host‐country agricultural firms. However, to realize their full potential, a sufficient absorptive capacity of the local firms is required. [EconLit Citations: F21, F23, Q17].

Spillover effects of foreign direct investment on manufacturing exports and imports in Indonesia

PurposeThis study aims to identify extensive and intensive margins in exports and imports and examine whether incoming foreign direct investments (FDI) benefit local firms in Indonesia through the export and import channels.Design/methodology/approachUsing Heckman’s two-step selection model to consider the potential of bias of self-selection in export–import participation, this study uses the firm-level data from 2008 to 2015 collected from Statistik Industri and proximate both export and import spillovers.FindingsThe authors found that internal factors are critical for a firm to be an exporter, signaling self-selection in exports and imports. Spillover effects from FDI (spatial properties) support export but lower import propensity and intensity.Research limitations/implicationsThis study implies that improving human capital (absorptive capacity) is needed to accelerate export intensity and policies supporting FDI inflows in complementary sectors (noncompeting industries) can increase export propensity and intensity and reduce imports.Originality/valueThis study contributes to the literature in several ways. First, the proposed export spillovers model that accounts for impacts through a demonstration channel is applied to the import channel. Moreover, this study extends the model developed by Franco and Sasidharan (2010) and Yasin et al. (2022) by incorporating spatial spillover effects at the provincial level. Subsequently, the authors test whether a firm’s technological intensity determines export–import propensity and intensity. This can indicate whether specific sectors are more likely to participate in international activities based on their use of technology.

Heterogeneity and influence factors of carbon productivity: Evidence from Chinese manufacturing enterprises

Understanding influence factors and heterogeneity of carbon productivity in manufacturing enterprises can provide important guidance for designing carbon reduction policies. In this study, the heterogeneity of carbon productivity of Chinese manufacturing enterprises was measured by employing enterprise-level data from 2001 to 2011. The empirical findings demonstrated that carbon productivity did not show a decreasing trend over time, but the changing pattern varied across industries. Based on a panel regression model, the result also found that both enterprise features and external factors significantly affected carbon productivity. Asset size, enterprise age, management level, export intensity, marketization level and etc. significantly increased carbon productivity, while enterprise financing and government subsidies decreased the productivity. In addition, effects of factors on carbon productivity differed by enterprise types, so governments should formulate differentiated environmental policies for various enterprises.

Impact of imports from China on Indian manufacturing performance: an analysis of trade competitiveness

PurposeThe focus of this paper is to provide an assessment of the impact of imports from China on Indian manufacturing and capture the multifarious dimensions of India–China bilateral trade flows. By examining the comparative disadvantage imports (RCA<1), the paper critically examines their significance on India's industry output and performance and underlines factors beyond trade competitiveness.Design/methodology/approachFor examining the impact of India's manufacturing imports from China on industry performance, four stages of analysis is adopted. First, the imports with RCA <1 have been identified. For these, BRCA was also computed. Second, trends in industry performance associated with high imports from China. Third, for estimating the impact of imports on industry output, augmented production function was specified and estimated with imports from China as a potential determinant. And fourth, comparison of industry performance between India and China.FindingsThe impact of imports from China on industry output is positive and significant. A 1% increase/decrease in the share of China in world imports will result in output increasing by 0.31%. The rise in imports from China seems to be on account of non-availability of necessary intermediate and capital goods domestically, thereby making these imports critical and complementary for production. This negates the threat perception of imports from China.Research limitations/implicationsThe paper recognizes the need for understanding the firm heterogeneity in import decisions and R&D intensity of imports. Across industries, the drivers for firms' decisions to import are “learning by importing’ and “self-selection” (Camino-Magro et al., 2020). Also, another important dimension at the firm-level analysis is the elasticity of substitution between foreign and domestic inputs. If the elasticity of substitution is low then high import barriers will lead to reduction of domestic output. These firm-level issues are important for effective policy interventions.Practical implicationsOne, the inward looking focus of the industry which is exhibited in low export intensity will not provide the necessary impetus to propel the manufacturing sector to a higher technology frontier and translate the productivity gains to export competitiveness. Two, unless the domestic manufacturing is propelled from the current low/medium technology to high technology products, the current policy thrust on “self-reliance” cannot be realized.Originality/valueAnalysis is based on manufacturing imports with RCA<1 from China thereby underlining factors beyond trade competitiveness not covered by RCA methodology. Complementing the quantitative analysis with economic policy developments in China and India and contrasting the same has provided insights into the real factors determining India–China bilateral trade.

Board diversity and export intensity: the moderating role of firm size

PurposeBuilding on resource dependence theory and contingency theory (CT) and focusing on an emerging market setting, this study investigates how demographic board diversity (BD) influences the export intensity (EI) of firms listed on Borsa Istanbul (BIST), with the moderating effect of firm size, as a contingency factor, on this interaction.Design/methodology/approachUsing a sample of 65 exporting firms listed on the BIST Industrials Index, this study explores how demographic attributes of board members, represented by the board diversity index (BDI), affects EI by employing panel data analysis over the period of 2016–2020.FindingsThe results suggest that there is a negative relationship between BD and EI, but firm size has a positive moderating effect on the association of BD and EI, indicating that large firms with diverse boards are more prone to access foreign markets and make export. The findings further indicate that board size and CEO duality have a negative and significant effect on EI, while marketing intensity has a positive and significant impact.Research limitations/implicationsThe sample covers only public companies listed on the BIST Industrials Index, and the impact of board characteristics on the EI is analyzed for a limited time frame, i.e. from 2016 to 2020.Practical implicationsThe findings help business executives better understand the contribution of the firm size on the interaction of BD and EI and offers valuable insights to companies to gain a competitive edge in international markets.Originality/valueThe study provides evidence on the effects of board attributes on the EI from the perspective of emerging countries. It also helps to gain a deeper understanding of how board dynamics contribute to the internationalization of companies.

Technology, innovation and SMEs' export intensity: Evidence from Morocco

This study seeks to understand the scarcely examined relationships between SMEs' foreign technology licensing, R&D expenditure, innovation and export intensity. Espousing an integrated open innovation and self-selection paradigm, observations of 446 Moroccan SMEs are analysed through structural equation modelling. The definitive path analysis showed that foreign technology licensing and R&D expenditure distinctively affect innovation and, in turn, innovation increases export intensity. In further insights, to illustrate how the distribution of these inputs enhances internationalisation, a probabilistic analysis shows that foreign technology licensing, R&D expenditure and innovation will incrementally stimulate export intensity by >71 %. The permutations of these variables in the fresh setting of Morocco summon scholars' empirical attention at the same time as policymakers' consideration.