Export Intensity Research Articles

Effect of Offshoring on Exports of Firms in South Korea

This study empirically investigates the export-magnification effect of offshoring using a firm-level panel dataset from the manufacturing sector in South Korea. It estimates the impact of offshoring activities on export performance by examining intra-firm and arm’s length offshoring. The empirical evidence demonstrates the export-magnification effect of offshoring on both export market participation and export intensity. Particularly, the export-magnification effect of offshoring still exists among export entrants switching from non-exporters to exporters. Moreover, a greater export-magnification effect from intra-firm offshoring than from arm’s length offshoring is found using instrumental variable (IV) Tobit and probit models. This indicates that the vertical integration of production processes through intra-firm offshoring has a greater effect on export performance than international outsourcing to third parties.

Impact of Days to Receivable on the Profitability of Exporting Coal Companies in Indonesia

This study examines the effects of exchange rates, export intensity, and days to receivable on the profitability of Indonesian coal exporting companies, using panel data from 2015 to 2023. The objective is to find if export intensity and exchange rate impedes the effect of days to receivable on profitability. Interaction analyses reveal that the positive impact of receivables on profitability diminishes with increasing exchange rates. Conversely, the interaction between days to receivable and export intensity does not significantly affect profitability. Therefore, it might be beneficial for Indonesian coal companies should explore implementing more flexible trade credit policies to enhance customer relationships, particularly during periods of rupiah appreciation.

Firm specifics, trade liberalization outcomes, and export intensity with the moderating role of location advantages—Empirical evidence from Vietnam

Firm specifics, trade liberalization outcomes, and export intensity with the moderating role of location advantages—Empirical evidence from Vietnam

Subsidiary strategy and importance of standards: An institutional development of the integration-responsiveness framework

According to the integration–responsiveness framework, subsidiaries of multinational enterprises (MNEs) are assigned different strategic roles depending on the business environments they operate in. MNEs are classified as multinational, international, transnational, and global firms. Although standards are crucial for both export performance and Foreign Direct Investment, there is no scientific knowledge on how different types of standards interrelate with MNE strategies. Derived from the review of the limited literature on the role of different types of standards for different MNEs subsidiary strategies, we take an institutional theory perspective and position different types of standards within the integration–responsiveness framework. Based on data collected within the German Standardization Panel, cluster analysis is performed confirming that MNEs’ subsidiary strategies can be grouped according to the importance of formal and company standards. While conformity with national formal standards is necessary to meet pressure for local responsiveness, the application of international standards provides firms with access to global markets. Company standards and management system standards are important to transnational firms to achieve efficiency gains and improve bargaining positions. We compare the export intensity of MNEs with different subsidiary strategies to validate our clustering. In addition, different motives for applying different types of standards confirm our conceptual positioning.

Coming Home in the Age of Industry 4.0? The Effects of Offshoring and Backshoring on Manufacturing Companies’ Success

This study explores the effects of offshoring and backshoring on value creation per employee within the manufacturing sector by investigating the difference between firms that did and those that did not engage in corresponding relocation activities. Historically, offshoring has been a strategy to reduce costs and increase efficiency. However, the rise of advanced digital technologies and changing market dynamics have sparked a countertrend toward backshoring. Using data from the European Manufacturing Survey, this research examines how these strategies impact value creation, also taking into account the roles of sales growth and export intensity as potential moderators. The results of hierarchical regression analysis indicate that neither firms that have engaged in offshoring of production nor firms that have engaged in offshoring of R&D have significantly higher or lower value creation per employee than those that did not. In contrast, firms that have engaged in backshoring of production realize higher value creation when coupled with high sales growth. Firms that have engaged in backshoring of R&D, on the other hand, realize higher value creation when combined with high export intensity. These findings highlight the importance of aligning strategic decisions with both technological capabilities and market conditions to enhance productivity. The study suggests that a balanced and holistic approach, integrating both offshoring and backshoring strategies tailored to specific business contexts, can optimize value creation and maintain competitiveness in a rapidly evolving global landscape.

Industry clusters and firm performance: Evidence from the leather product industry in Addis Ababa

Industrial clustering is the co-location of firms in a geographic area, which can lead to numerous economic benefits such as joint resources and knowledge pooling, R&D collaboration, technology sharing, and joint marketing. This study aims to examine the influence of industrial clustering on the performance of firms in the leather and leather products industry in Addis Ababa. Moreover, this study aims to investigates whether innovation capacity and collaboration networks indirectly contribute to the relationship between clustering factors and firms' performance. In this study, both primary and secondary data were collected for analysis. Partial Least Squares Structural Equation Modeling was employed to explore the impact of clustering on performance in terms of innovation, job creation, attracting investment, export intensity, and productivity growth. This study found that a one-unit increase in cluster factors is associated with a 0.43-unit increase in firm performance. The mediation analysis revealed that collaboration networks mediate the relationship between cluster factors and firm performance by 0.21 and innovation capacity mediates the relationship between cluster factors and firm performance by 0.15 units. The findings indicate that industrial clusters strongly influence firm performance within the leather industry in Addis Ababa. Therefore, the results suggest that innovation capacity and collaboration networks are mechanisms through which industrial clusters affect firm performance. Future researchers should explore the cluster effect in other industrial sectors and regions to validate the research findings.

Learning by exporting: the moderating role of employee human capital

PurposeThe purpose of this study is to explore the means by which exporters foster innovation via the learning-by-exporting effect and to appraise the moderating role of employee human capital in the export–innovation relationship.Design/methodology/approachLeveraging the linked-survey-secondary data from the Human Capital Corporate Panel (HCCP) spanning 2011–2017, with 890 observations from 228 Korean exporters, this study utilizes Generalized Least Squares (GLS) regression to empirically test the proposed hypotheses.FindingsThe results indicate that exporting significantly boosts a firm’s innovation performance by encouraging the generation of new concepts in products, services, technologies and/or production lines. Moreover, the presence of international talent and highly educated staff positively moderates the relationship between export intensity and innovation performance.Originality/valueBy integrating organizational learning and human capital theories, this study yields theoretical and managerial insights by elucidating the roles of exporting and human capital in advancing innovation performance, thereby guiding corporate export strategies and human resource policies.

Can Servicification Benefit Manufacturing Exports? Empirical Results for India

To enhance manufacturing exports, India, a major player in the services segment, has recently created an enabling environment through the launch of several programmes, for example, the ‘Make-in-India’ and the production-linked incentive (PLI) schemes. As the firm-level evidence on the synergies between services input use (i.e., servicification) and manufacturing exports in the country is relatively scarce, the current analysis studies the relationship between them by using the CMIE-Prowess dataset over a period of 2000–2019, for both new and existing exporting firms. At the firm level, the article uses a two-step system generalized method of moments (GMM) estimator for studying the impact on export intensity, while a dynamic panel probit model is used to study the impacts on the decision to export. Apart from the analysis at the aggregate level, the influence of servicification is also judged for the low-tech and mid-to-hi-tech sectors separately and the disaggregated industry level. The observed positive relationship between servicification and manufacturing exports implies that the integration of competitiveness in the field of services with hi-tech manufacturing sectors can enhance India’s exports on the one hand and deepen firm-level global value chains participation on the other hand. JEL Codes: C23, F12, F14, F23, L25, L80

Does export promotion enhance firm-level intensive margin of exports? Evidence from a meta-regression analysis

PurposeThe impact of export promotion programs (EPPs) on the intensive margin of exports remains somewhat uncertain. This study tackles a crucial question: does export promotion enhance firm-level intensive margin of exports?Design/methodology/approachWe draw upon comprehensive empirical research conducted up to 2023. We collected 951 estimates, constructed 22 variables, captured diverse contexts and employed a meta-analytical approach to scrutinize the considerable variation in findings.FindingsThe overall meta-effect, after filtering out publication bias, is positive and statistically significant. Firms receiving EPP support exhibit an export intensity that is 1–9% higher than firms not participating in such programs. Assessing the mechanisms through which EPPs bolster this, we observe that support in the form of various services plays a more substantial role compared to assistance in the form of financial resources.Research limitations/implicationsEvaluating EPPs and their activities in terms of social welfare falls beyond the scope of this paper, which specifically focuses on the benefits of EPPs to export intensity. Subsequent research should undertake a comprehensive evaluation, considering both economic impacts and costs for accurate assessments of welfare. We also suggest that future meta-analyses explore other dimensions of firm-level performance linked to EPPs.Practical implicationsPublication bias distorts the impacts of EPPs, leading to an overstatement of their actual effects. Adjusting for publication bias, the practical significance of EPPs for a country’s trade intensity appears to be limited. Additionally, the provision of diverse activities and services primarily contributes to the amplification of export margins as compared to subsidies and grants. While larger firms initially benefit more from EPPs, these effects are found to be transitory.Originality/valueThis is the first meta-analysis scrutinizing the impact of EPPs, specifically concentrating on the firm-level intensive margin of exports.

Discouraged exporters, regional resilience and the “Slow Burn” shock of Brexit: Unpacking the trade-related consequences for UK SMEs

Invoking the concept of regional resilience, this paper investigates how Brexit has affected the exporting behaviour of UK small and medium-sized enterprises (SMEs). The research found only two UK regions, Northern Ireland and London, remained strongly export-oriented by volume and intensity of exports to the EU. Across most other regions we detected strong levels of disengagement from exporting, whereby “discouraged exporters” may experience longer-term productivity “scarring” effects instigated by reduced exposure to EU markets. Resilience to Brexit is shown to be spatially skewed and most robust in regions spatially proximate to, and in closest regulatory alignment with, the EU.

Partner heterogeneity and driving factors of China's export embodied energy intensity

Although China's energy consumption is very high, foreign demand has become crucial factor affecting China's energy consumption due to exports. A detailed analysis of the embodied energy intensity of China's exports from the demand side could provide valuable insight into promoting China's energy-saving development. This paper explores disparities in the embodied energy intensity of China's exports to different trading partners and the energy supply structure behind these exports. Furthermore, it explores the driving factors of export embodied energy intensity using multiplicative structural decomposition analysis. The results show that China's export embodied energy intensity to developing countries, such as India, is higher than that of European and American countries; however, a convergence trend has emerged over time. Regarding the driving factors influencing changes in export embodied energy intensity over time, the sectoral energy intensity effect plays a pivotal role in promoting its decline, while the production structure and export structure effects change from inhibition to weak promotion. The adjustment of export structure has significant potential for reducing China's export embodied energy intensity, especially in emerging economies. Finally, this paper proposes policy directions for collaborative opening up, energy saving, and emission reduction goals.

Clean, competitive, and productive? The impact of environment‐friendly technologies on exporting and productivity of the manufacturing companies in Belarus

AbstractThe impact of trade on the environment is a big concern, with increasing focus on the role of international trade in climate change. This study explores the bidirectional relationships between export intensity, adoption of environmentally friendly measures, and productivity using the firm‐level data from Belarus. It aims to answer whether exporting enterprises are more environmentally oriented and whether the application of cleaner technologies brings productivity improvement and increases the export intensity of an enterprise. We estimate a system of structural equations using three‐stage least squares in which export intensity, adoption of environmentally friendly measures, and productivity are by design treated as endogenous. The findings show that when a company adopts one more environmentally friendly measure, it increases its export intensity by 4.4%–4.6%. Adoption of cleaner technologies improves labor productivity in a company by 20.7%, but it is negatively associated with its resource productivity (a 1.9% decrease), which results in the neutral effect on the total productivity.

Analyzing the impacts of watershed management interventions and scenarios on sediment export reduction in yezat watershed, north west Ethiopia using InVEST model

ABSTRACT This study aimed at assessing the long term impacts of watershed management interventions and scenarios on sediment export reduction in the data-scarce region of the Yezat watershed in north-west Ethiopia. The modified ecosystem services valuation model (InVEST) was employed to evaluate the amount of sediment export in the watershed. Different watershed management intervention scenarios were applied to evaluate the effectiveness of watershed management interventions on sediment export reduction. The results of the study showed that the mean annual sediment yield was 35 tons ha yr in 20000, due to the expansion of cultivated land and built-up area. Conversely, it decreased from 35 ton ha yr in 2000 -18.4 ton ha yr in 2021 due to watershed management interventions. On the contrary, moderate, severe, and very severe categories of sediment export intensity were high in 2000. But it decreased in 2021 due to watershed management interventions. The mean annual sediment export in the baseline scenario (BS) was 35 tons per year, which was reduced to 13.39 tons per year, 3.46 tons per year, and 1.17 tons per year in the reforestation scenario, soil/stone bund, and integrated scenarios, respectively. The result revealed that areas covered by high sediment severity classes were reduced.

Foreign Ownership, Board of Directors, and Environmental Commitment in European International New Ventures

ABSTRACTThis study examines the effect of foreign ownership and the presence of a board of directors on commitment to environmental issues and export intensity. Based on a robust path analysis of 181 international new ventures spanning 25 European countries, it is found that foreign ownership significantly boosts the environmental commitment and exports of this breed of firms. On the contrary, board of directors bears no relationship with the aforementioned outcomes. Theoretically, this paper expands the international entrepreneurship discourse by uncommonly investigating environmental issues in the context of international new ventures. Practically, insights are offered to owners/managers of international new ventures to reflect on the distinctive value of foreign ownership and board of directors in their environmental and internationalization agenda. Regional policymakers' attention is drawn to the contribution of foreign ownership as a harbinger of environmental performance and greater export intensity.

The Role of EU Transport Market Liberalization in Shaping Directions of Rail Energy Consumption Rationalization in Relation to the Export of Goods: The Case of Poland

This article discusses the impact of rail market liberalization on the energy intensity of rail in relation to the export of goods, as well as the identification of multidimensional cause-and-effect relationships between rail energy intensity and the importing country’s economic condition, transport performance, and transport distance. Three research questions were formulated: (1) Does the liberalization of the EU transport market and the implementation of a sustainable transport policy contribute to minimizing the energy consumption of rail transport? (2) Does the pursuit of economic growth allow for reducing the energy intensity of goods exported by rail transport in global trade? (3) Is there a justified paradigm for shifting long-distance freight transport from roads to rail? This study concerned 21 directions of the export of goods transported by rail from Poland to partner countries (worldwide) in 2010–2020. A panel model of rail transport energy consumption with random effects was constructed. As a result of rail market liberalization, the export of goods transported by rail across great distances occurs without harming economic development and leads to a reduction in energy intensity. On this basis, key strategies were formulated to promote rail transport in reducing the energy intensity of the transport sector. The authors filled the research gap by identifying the relationship between the energy intensity of exports of goods by rail transport in value terms, depending on the European transport market’s liberalization process, the importing countries’ economic situation, transport volume, and distance. The presented approach is innovative and can be adapted to the analysis of other modes of transport, including road transport, and other countries (and their structure and export directions).

Home Peers, Business Owners’ Gender, and the Export Intensity of SMEs

Small and medium-sized enterprises (SMEs) can improve their export performance by co-locating with export firms from the same industry and country. However, the export implications are yet to be addressed systematically. This study investigates when and how women-owned SMEs convert their geographic proximity to home peers through social proximity and cognitive proximity into high export intensity. We develop a nuanced knowledge spillover perspective incorporating gender mechanisms to clarify the relationship between home peers and SMEs’ export intensity at the regional and national levels. To test our hypotheses, we designed quantitative research using a survey database from Statistics Canada, Survey on Financing and Growth of Small and Medium Enterprises (SFGSME), with a sample of 9,977 Canadian SMEs. Our study shows that, among other things, home peers’ positive impact on SMEs’ export intensity is more significant when their owners are exposed to a larger number of relatively close same-gender home peers (i.e., same-gender regional home peers). Moreover, we show that such positive home-peer effects on SMEs’ export intensity are even stronger for women business owners than men business owners. We clarify our contributions by discussing the theoretical and practical implications of our findings. By demonstrating the significance of same-gender regional home peers for women owners, we contribute to the knowledge spillover perspective on exporting, emerging research streams on home peers, and women entrepreneurship research in the international entrepreneurship field. Our findings also suggest that women entrepreneurs can particularly benefit from government-funded export promotion programs when the programs are appropriately designed and promoted to women entrepreneurs.

Can the expansion of market size increase firm markup? Evidence from China

ABSTRACT Traditional international trade theory suggests that a larger market size leads to more intense competition, thereby reducing firm markup. However, this conclusion does not hold in our research. Based on the theoretical model constructed by Melitz, this paper makes the following extensions: First, introducing the cost-saving effect outside of the competitive effect discussed in traditional international trade theory. Second, introducing a specific marginal cost function, which deepens the analysis of the operating mechanism. What’s more, earlier models focused solely on the market size of the industry itself (the target industry), whereas our analysis also takes into account the impact of the market size of its upstream and downstream industries. Our model indicates that the impact of market size on firm markup depends on the relative magnitude of the competitive effect and the cost-saving effect. With firm cost following a Pareto distribution, the expansion of market size leads to an increase in firm markup. In addition, this paper presents a spatial econometric model using industrial firms’ data from China. The results indicate that the promoting effect of market size on firm markup is more prominent among top-tier firms, state-owned firms, low export intensity firms, and firms in technology intensive industries.

Agglomeration economies and firm’s export intensity: evidence from Portuguese manufacturing SMEs

Export performance is a highly debated topic in the literature, with no consensus on how to measure it or what factors determine it. Most studies divide these factors into internal and external determinants, with a focus on internal determinants. This study, however, focuses on external determinants, namely agglomeration economies such as localization and urbanization economies and export spillovers, and their impact on a firm’s export intensity. Based on a large sample of Portuguese manufacturing SMEs over the period 2010 to 2018 (191,920 firm/year observations), the estimation results through the two-stage least squares method with fixed effects strongly indicate the existence of a positive relationship between agglomeration economies, particularly localization economies and export spillovers, and export performance. These findings suggest that firms located in areas with a high concentration of other firms in the same industry and other exporting firms tend to have better export performance, which has important implications for policymakers.

Cloud computing and rural globalization: Evidence for the U.S. nonfarm economy

We use confidential firm-level data to examine the association between export intensity and subscription to cloud computer services – a technology that often requires very high-speed broadband. Our focus on rural nonfarm exports is motivated by the increasing concentration of manufacturing—the dominant export sector—in nonmetropolitan counties and the large public investment in extending high-speed broadband to underserved parts of the U.S. We find that cloud computing is associated with higher export intensity that is consistent with exporting activity placing new demands on IT-enabled functions such as order fulfillment and tracking, marketing, or document control.

Pollution Emission Intensity and Domestic Value-Added Rate of Firms' Exports: An Empirical Analysis Based on China’s Microdata

Abstract With the development of global economic integration, global value chains (GVC) have become the mainstay of the global economy. China's low-end embedded model relying on its labor advantage can no longer bring new economic benefits, and the ensuing environmental problems are intensifying. Therefore, there is an urgent need to explore a win-win path for the greening of China's economy and the improvement of GVC status. Using micro-firm data, the article explores the role of pollution emission intensity of China's firms in influencing the domestic value-added rate of their exports. The study finds that (1) the increase of pollution emission intensity of Chinese enterprises has a significant inhibiting effect on their export domestic value-added rate; (2) the pollution emission intensity of Chinese enterprises under different regions, different ownership and different trading methods has differentiated effects on their export domestic value-added rate. Among them, the pollution emission intensity of state-owned enterprises, enterprises in western regions and processing trade enterprises have a more significant inhibitory effect on the domestic value-added rate of their exports; (3) the increase of total factor productivity of enterprises can slow down the negative effect of enterprise pollution emission intensity on the domestic value-added rate of its export. Keywords: Enterprise Pollution Emission Intensity, Export Domestic Value-Added Rate, Global Value Chain Embeddedness.