Likelihood Of Exporting Research Articles

Taking a time-out from exporting: Implications for the likelihood of export re-entry and re-entry export performance

Drawing from Organizational Learning Theory, we explain how the “time-out period” from exporting affects a) the likelihood of re-starting exporting and b) re-entry export performance. We also explain how foreign collaboration influences these two relationships. We show that the time-out period has an inverted U-shaped relationship with the likelihood of re-starting exporting, and a U-shaped relationship with re-entry export performance. Foreign collaboration enhances managerial confidence and thereby increases the likelihood of re-starting exporting during the earlier phases of the time-out period. It also enhances re-entry export performance by accelerating new knowledge accumulation in the later phases of the time-out period.

Impact of sourcing from the informal economy on the export likelihood and performance of emerging economy firms

AbstractBuilding on the institutional economics perspective, we study how local firms in an emerging economy exploit institutional voids by sourcing inputs from industries with a large informal economy. We argue that this allows them to build a cost-related competitive advantage and leverage it both to export and to enhance export performance. The empirical study uses a unique dataset compiled by the Mexican authorities covering manufacturing plants between 2005 and 2012. Our results indicate that firms operating in industries that procure from industries with an extensive informal economy are more likely to export and to have better export performance.

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

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.

PRODUCT INNOVATION AS THE CAUSE OF EXPORT PROPENSITY IN THE CAUCASUS: EMPIRICAL EVIDENCE FOR ARMENIA, AZERBAIJAN AND GEORGIA

Despite the extensiveness and abundance of empirical research in the existing literature, there is no clear view or position with respect to the role of innovation in exporting, especially regarding the heterogeneous impacts of different types of innovations (product, process, organizational and marketing innovations) on exporting. The objective of this article is the empirical verification of innovation as the cause of export propensity in firms from the South Caucasian countries (Armenia, Azerbaijan and Georgia). The empirical investigation is based on the data collected by the Enterprise Survey (World Bank Microdata), conducted among companies located in the Southern Caucasus. Seven hundred and seventy-six firms were selected through an appropriate procedure, including 279 from Armenia, 236 from Azerbaijan, and 261 from Georgia. Logit regression models were applied to determine the chances of exporting, depending on the type of innovations implemented by each company. The results of binomial logistic regression analysis demonstrate that product innovations play an important role in explaining SMEs’ export propensity in the South Caucasian countries. Moreover, the likelihood of export is seen to be positively related to the share of foreign capital in company structure. The general level of economy innovativeness in the Caucasus is low, but the share of foreign ownership in companies under consideration was relatively high, so the foreign investors probably played a key role in the innovations implemented by local ventures. It is most likely due to Armenia, Azerbaijan and Georgia going through an early stage in economic transition, in which soft innovations (organizational and marketing innovations) lag behind hard innovations. There is an evident lack of empirical studies of the role of innovation in the development of export in emerging countries, including the South Caucasian countries, and it still remains largely underexplored; therefore, the novelty of this research lies in the exploration of the Caucasian countries as emerging markets.

Determinants of Exports Behaviour of India’s Agro-processing Firms: Role of Technology, Imported Raw Materials and Logistics Infrastructure

Despite accounting for a sizeable share in the overall output and employment of the manufacturing sector, the export potential of India’s Agro-processing firms has received less attention. This article investigates the determinants of export propensity and intensity of relatively labour-intensive agro-processing firms in India with a focus on the role of technology adopted, the proportion of imported raw materials used and status of the logistics infrastructure at the location of the firm. The article makes use of the CMIE-PROWESS dataset to obtain a cross-section of agro-processing firms for the year 2016–2017 and the Logistic Ease Across Different States (LEADS) database. The empirical strategy involves the Heckman two-step process to address the sample selection bias originating in modelling export behaviour. The article finds that the likelihood of an agro-processing firm to enter the exporting market increases with an increase in technology enhancing investment in terms of expenditure on research and development and import of capital goods. Moreover, a better level of logistics infrastructure enhances the likelihood of exporting. The likelihood of a firm to export also increases with the increase in the use of imported raw materials, firm size, age and superior managerial quality. However, the paper finds only the expenditure on imported capital goods and imported raw materials to be positively and significantly associated with the export intensity of the exporting firms.

The influence of entrepreneurs\u2019 immigrant status and time on the perceived likelihood of exporting

We contribute in this paper to the scant literature on the factors and conditions influencing the development of different perceptions of potential international opportunities for immigrant and native entrepreneurs in the pre-internationalization phase. Specifically, we investigate what factors influence the perceived likelihood entrepreneurs have of exporting. Building on entrepreneurial intentions and opportunity-based entrepreneurial processes, we propose a cognitive account of perceived likelihood of exporting based on entrepreneurs’ perceptions of the desirability and feasibility of export opportunities. We investigate how the immigrant status (i.e., individual characteristics) and time (i.e., contextual factors) influence the relationship between the desirability and feasibility of exporting, and entrepreneurs’ perceived likelihood of exporting. We employ an experimental design on a matched-pair sample of 108 native and immigrant entrepreneurs in domestic technology-based firms. The results are a unique account of the cognitive antecedents of the perceived likelihood of exporting under different temporal conditions, comparing immigrant and native entrepreneurs. We discuss theoretical and practical implications.

Does environmental regulation affect firm exports? Evidence from wastewater discharge standard in China

This paper examines the effect of water pollution regulation on polluters' exporting decisions and exporting structure. Using a detailed firm-by-product level dataset, we employ a difference-in-differenceds model to identify the causal relationship between environmental regulation and firms' exporting performance. We find that stringent environmental regulation decreases both export likelihood and export values. Moreover, we examine the channels that the environmental regulation could affect firms' exporting performance through entry-exit of the export market, price transmission, adjustments of exporting destinations, and product switch. The tightening wastewater discharge standard appears to deter the new polluters rather than incumbents to enter the export market. Productive polluters could gain the relative larger export market by lowering down exporting prices and selling more products overseas. In response to this water pollution regulation, polluters would make substantial adjustments in their exporting destinations, exporting products, and exports value via different trade modes.

The impact of foreign influence on exporting through open innovation

AbstractForeign direct investment brings both increased competitive pressures and opportunities for domestic Small and Medium Sized Enterprises (SMEs). Competition may force them to seek new international markets, but also provide access to international customers. However, as economies become more knowledge‐based in order to access international markets, SMEs must seek to innovate. This study examines how foreign firm presence and innovation influence the exporting activities of SMEs. It contributes to the existing literature by dividing innovation into product/process innovation and in‐house/open innovation. With open innovation, products are more likely to be novel and productivity boosted to a larger degree. We interact different types of innovation with foreign influence to examine whether there is a moderating influence on the relationship. The individual firm level data and foreign influence data are from the Longitudinal Small Business Survey and Office for National Statistics. Whether firms are active exporters is explored using multilevel logit regressions. Both innovative activities and the foreign influence increase the likelihood of exporting. In‐house product innovation boosts export propensity to a lesser degree in areas with higher levels of foreign influence. The hypothesis that open innovation has more impact on exporting activities when foreign influence is greater is not supported for either type of innovation.

Does Environmental Regulation Affect Firm Exports? Evidence from Wastewater Discharge Standard in China

This paper examines the effect of water pollution regulation on polluters’ exporting decisions and exporting structure. Using detailed firm-by-product level dataset, we employ a difference-in-differences model to identify the causal relationship between environmental regulation and firms’ exporting performance. We find that the stringent regulation decreases both export likelihood and export values. Moreover, we examine the channels that the environmental regulation could affect firms’ exporting performance through entry-exit of the export market, price transmission, adjustments of exporting destinations, and product switch. The tightening wastewater discharge standard appears to deter the new polluters rather than incumbents to enter the export market. Productive polluters could gain the relative larger export market by lowering down exporting prices and selling more products overseas. In response to this water pollution regulation, polluters would make substantial adjustments in their exporting destinations, exporting products, and exports value via different trade modes.

Network ties and export propensity of Vietnamese small and medium enterprises

ABSTRACT This paper investigates the impacts of different network ties on export propensity of Vietnamese small and medium enterprises (SMEs) in the manufacturing sector. Using data from a survey of over 2,600 manufacturing SMEs in 2015, we found that social networks contribute positively to the export propensity of SMEs, while the size of business networks negatively associates with the likelihood of export. However, bank networks and political networks are not significant for the propensity to export of Vietnamese SMEs. We discuss the results in detail and offer recommendations for SME owners, managers and policy makers.

Influence of Innovativeness, Environmental Competitiveness and Government, Industry and Professional Networks on SME Export Likelihood

The purpose of this study is to examine how small to medium‐sized enterprises (SMEs) in different industry segments utilize government, industry, and professional networks and to test the influence of SME innovativeness, environmental competitiveness and network type for SME export likelihood. Previous studies on networks and exports tend to be qualitative and based on small samples. This study adds to previous scholarship by investigating a large database consisting of 2,263 Australian SMEs. Results indicate SME innovativeness contributes positively to export likelihood while contrary to extant studies, no significant relationship is observed between environmental competitiveness and export likelihood. Moreover, a significant, positive relationship exists between government networks and export likelihood, and a positive though weaker relationship between industry networks and export likelihood. On average, the likelihood of SMEs receiving export income increases by 47 percent if all three network types are accessed between one and three times a year, controlling for other factors. Further analyses of industry sub‐segments indicate a stronger relationship between industry networks and export likelihood.

Local formal interpersonal networks and SMEs internationalisation: Empirical evidence from the UK

This article uses data from the UK Longitudinal Small Business Survey (2015) to empirically test the relationship between local (formal and informal) interpersonal networks and exporting. Our results suggest that local interpersonal networks increase the likelihood of exporting. More importantly, we find that the role of formal interpersonal networks (e.g. accountants) on internationalisation increases as firm size increases, while the link between informal interpersonal networks (e.g. family) and exporting becomes weaker. We argue that larger firms have more complex operations and diverse structures than smaller firms that require the engagement of formal interpersonal networks to help with the internationalisation process.

Internationalisation and Innovation Intensities of Polish Manufacturing Firms: A Close Nexus?

Objective : The paper aims at the empirical identification of the nexus between innovation and internationalisation intensities in a sample of Polish manufacturing companies. Research Design & Methods : Using a unique dataset combining micro-level financial data from InfoCredit and results from an extensive survey we follow the approach of Altomonte, Aquilante, Ottaviano & Bekes (2013). We define innovation and internationalisation intensities and analyse the two dimensions disjointly and then simultaneously use formal econometric tools. Findings: Both dimensions are closely and robustly correlated. There is some evidence for the causality going from innovation to internationalisation. Polish manufacturing companies have in general low innovation and internationalisation intensity. Rising innovation intensity allows companies to become more internationalised and in particular, it raises their probability of exporting. Mean characteristics of firms, such as employment, sales or productivity, change along the two examined dimensions. Implications & Recommendations: Our results firmly support the postulates of the heterogeneous firms’ trade theory. The results strongly support the introduction of a new type of economic policy in which internationalisation promotion and innovation promotion are simultaneously targeted at the level of a firm. Contribution & Value Added: We extensively analyse innovation and internationalisation intensities for manufacturing firms from Poland. Using a logit model we show their impact on the likelihood of exporting. We furthermore apply the classification of exporting firms along temporal and geographical dimensions identifying main features and links to the key dimensions.

How do firms finance their exports? – evidence from China

ABSTRACTUsing a firm-level production data over the period of 2005–2009 from China, this paper provides a new empirical evidence on how firms finance their exports when they have several financial options. The main results of the paper can be summarized as follows. First, firms who have better access to any finance are more likely to export and export more. More financial options lead to a higher export probability and capacity due to the complementary relation between financial options. Second, of all financial options, the internal finance captured by cash holdings or profit plays the most important role on firms’ export likelihood and volume. Firms rely more on the external finance through borrowing to start exporting, but depend more on issuing stocks to their shareholders to expand their exports. Third, subsample results suggest that the financial option of issuing stocks is generally more important for firms who have worse access to external finance in determining export propensity and quantity, such as private-owned firms, small-scale firms, young firms, and non-eastern firms.

Innovation and Export Performance: An Empirical Insight on the Effect of Innovation on Manufacturing Firms in Cameroon

The objective of this paper was to examine the effects of innovation types on the intensity and propensity to export by manufacturing firms in Cameroon. The data were secondary based on statistics collected by the International Development Research Centre (IDRC) on the manufacturing firms in Cameroon between 2011 and 2013. The data were analysed using the tobit and logit estimation techniques. The analyses revealed that different innovation activities namely process, product, market and organisation innovations have been instituted by firms in Cameroon. The empirical results showed that innovation has a positive effect on both the probability and volume to export. Specifically, only non-technological innovations significantly account for variations in export performance, while technological embedded innovations insignificantly influence export variation. Precisely, the results indicated that market and organizational innovations significantly increase intensity and propensity to export, while product innovation has a significant and positive effect on quantity exported and not on export likelihood. Other findings showed that corruption retards export performance while a stable macro-economy improved upon export performance. The findings therefore support government and public policies that promote innovative ways of firms in carrying out their daily activities.

Cluster development policy, SME’s performance, and spillovers: evidence from Brazil

This paper studies the impact of the Brazilian Arranjos Productivos Locais (APL) policy, a cluster development policy, on small and medium enterprises’ (SMEs) performance. Using firm-level data on SMEs for the years 2002–2009, this paper combines fixed effects with reweighting methods to estimate both the direct and the indirect causal effects of participating in the APL policy on employment growth, value of total exports, and likelihood of exporting. Our results show that APL policy generates a positive direct impact on the three outcomes of interest. They also show evidence of short-term negative spillovers effects on employment in the first year after the policy implementation and positive spillovers on export outcomes in the medium and long term. Thus, our findings highlight the importance of accounting for the timing and gestation periods of the effects on firm performances when assessing the impact of clusters policies.

Trade and access to finance of SMEs: is there a nexus?

Limited resources and barriers to entry are critically higher for small and medium enterprises (SMEs) than for large companies. One of the reasons explaining why the resources of SMEs are scarce is their limited access to financial services. This in turn reduces the likelihood of exporting. For this reason, using the census of SMEs done by the Central Bank of Egypt and the Egyptian Banking Institute, we try to examine the impact of access to finance on their export performance. We measure the latter by the extensive margin that means the probability of becoming an exporter and the probability of serving several markets. We found a significant and positive impact of dealing with banks and having banking facilities on the probability of exporting and that of exporting to more than one destination. Thus, wider and more efficient financial services are likely to increase the number of exporters and boost exports’ diversification.

Spillover Effects from Inward FDI on the Exporting Decisions of Chilean Manufacturing Plants

We study the presence of spillover effects on three exporting decisions (likelihood, quantity, propensity) of Chilean manufacturing firms during the period 2001–2004. Evidence suggests that Chilean firm’s export likelihood is positively affected by other domestic firms’ exports. In contrast, exports by MNEs operating in Chile negatively affect Chilean firm’s export likelihood, although MNE-employment generates positive spillover effects, suggesting externalities in human capital. We also find evidence of spillovers from MNE activity on the proportion of production the firm exports (export propensity), but not on how much they decide to export (export quantity).

Firm location and the determinants of exporting in low- and middle-income countries

Using a cross-section of more than 35,000 manufacturing and services firms in 76 low- and middle-income countries, we assess how firm location determines the likelihood of exporting. Results from a probit model show that, in addition to firm-specific characteristics, both regional investment climate and agglomeration factors have a significant impact on export participation. Export spillovers and industry diversity are associated with increased exporting, but the impact varies by location and sector. The analysis finds that firm-level determinants of exporting matter more for firms located in non-core regions, whereas regional determinants and agglomeration economies play a larger role in core regions.

Export market participation with sunk costs and firm heterogeneity

In this article we investigate the importance of sunk costs, firm characteristics and spillovers from nearby exporters on a firm's decision to participate in exporting. The empirical analysis involves the estimation of a nonstructural, discrete choice, dynamic model with firm heterogeneity. By using panel data for Estonian companies from 1994 to 1999 we find that: (i) both sunk costs and observable firm characteristics are important determinants of export market participation; (ii) previous history matters, in that, if a firm has been exporting the previous period or the period before, it significantly increases the likelihood of the firm exporting in the current period; (iii) larger firms with high capital intensity and foreign ownership are more likely to be exporters; (iv) operating in an export-oriented industry increases a firm's likelihood of exporting.