Combining Information Technology and Decentralized Workplace Organization: SMEs versus Larger Firms

This paper examines whether information technology (IT) and decentralized and incentive-based workplace organization are complementary only for large firms or also for smaller firms. Previous empirical evidence suggesting complementarity between IT and decentralization is mainly based on large firms. Using data from a sample of 3,288 small and medium-sized enterprises (SMEs) and 595 larger firms from the manufacturing and service sector in Germany, it appears that SMEs with decentralized and incentive-based work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and workplace organization are individually associated with higher productivity, but the combination of IT and decentralization does not yield a productivity premium. In contrast, the productivity of IT depends positively on decentralization for large firms. The findings suggest that combining IT and decentralized workplace organization seems only to be a successful strategy for larger firms.     

Learning by exporting: Lessons from high-technology SMEs

We investigate the learning by exporting hypothesis by examining the effect of exporting on the subsequent innovation performance of a sample of high-technology SMEs based in the UK. We find evidence of learning by exporting, but the pattern of this effect is complex. Exporting helps high-tech SMEs innovate subsequently, but does not make them more innovation intensive. There is evidence that consistent exposure to export markets helps firms overcome the innovation hurdle, but that there is a positive scale effect of exposure to export markets which allows innovative firms to sell more of their new-to-market products on entering export markets. Service sector firms are able to reap the benefits of exposure to export markets at an earlier (entry) stage of the internationalization process than are manufacturing firms. Innovation-intensive firms exhibit a different pattern of entry to and exit from export markets from low-intensity innovators, and this is reflected in different effects of exporting.     

Adoption of Enterprise Application Software and Firm Performance

Due to the rapidly changing business and IT environments, firm-level adoption of IT shifted from in-house development to purchasing EA software. This paper analyzes the effects of EA (Enterprise Application) software – ERP, CRM, SCM, Groupware, KM, EAI – on SMEs’ productivity. The distinct feature of this paper is that I use a formal econometric approach with combined data of SMEs’ accounting and IT usage aspects, while case studies have been mostly used in the previous works. The empirical results show that Groupware and SCM significantly raise the SMEs’ productivity, and the manufacturing sector has stronger effects than the service sector. From these results, the following implications are derived. First, the adoption rate and the real benefits of EA software are not closely related domestically. Second, in SMEs, EA software facilitating the inter-firm relationship is more effective than EA software focusing on the internal efficiency. Third, easy-to-understand, and relatively long-experienced enterprise applications are more effective than hard-to-understand and brand-new applications. Finally, the government IT policy on SMEs should focus on the process coordination and standardization of the manufacturing sector with upstream and downstream firms.     

Firm productivity and export markets: a non-parametric approach

This paper examines total factor productivity differences between exporting and non-exporting firms. These differences are documented on the basis of a sample of Spanish manufacturing firms over the period 1991-1996. The paper also examines two complementary explanations for the greater productivity of exporting firms: (1) the market selection hypothesis, and (2) the learning hypothesis. Non-parametric tests are proposed and implemented for testing these hypotheses. Results indicate clearly higher levels of productivity for exporting firms than for non-exporting firms. With respect to the relative merits of the selection and the learning hypotheses, we find evidence supporting the self-selection of more productive firms in the export market. The evidence in favor of learning-by-exporting is rather weak, and limited to younger exporters.     

Do exports generate higher productivity? Evidence from Slovenia

I use matched sampling techniques to analyze whether firms that start exporting become more productive, controlling for the self-selection into export markets. To this end, I use micro data of Slovenian manufacturing firms operating in the period 1994-2000. Overall I find that export entrants become more productive once they start exporting. The productivity gap between exporters and their domestic counterparts increases further over time. These results also hold at the industry level and are robust to other controls that may be associated with increased productivity, such as private ownership. Using information on the (firm-level) destination of exports, I find that the productivity gains are higher for firms exporting towards high income regions.     

Exporting and productivity in business services: Evidence from the United States

Does exporting make firms more productive, or do more productive firms choose to become exporters? This paper considers the link between exporting and productivity for a sample of firms in US business services. We find that larger, more productive firms are more likely to become exporters, but that these factors do not necessarily influence the extent of exporting. This conforms with previous literature that there is a self-selection effect into exporting. We then test for the effect of exporting on productivity levels after allowing for this selection effect. We model both the relationship between exporting and productivity, and a simultaneous relationship between export intensity and productivity after allowing for selection bias. In both cases we find an association, indicating that productivity is positively linked both to exporting and to increased exposure to international markets.     

Antecedents to differentiation strategy in the exporting SME

Small- and medium-sized enterprises (SMEs) face various constraints related to size and resource base. Such firms face additional liabilities when they venture into foreign markets. Given such conditions, exporting SMEs should develop and leverage appropriate orientations and strategies, with a view to maximizing firm performance. In this paper, we examine the antecedents to differentiation strategy in the exporting SME. We focus on differentiation strategy because, among the generic strategies, it provides especially important competitive advantages to SMEs. Using survey data from several hundred SMEs, we examine key factors that support the use of differentiation strategy in exporting smaller firms. Findings support our model and hypotheses, and reveal strong roles for Entrepreneurial Orientation, International Growth Orientation, and International Learning Orientation, in the development of Differentiation Strategy. Findings hold implications for SMEs and resource-constrained firms generally.     

Exporting raises productivity in sub-Saharan African manufacturing firms

Proponents of trade liberalization argue that exporting helps firms to achieve higher productivity levels. This hypothesis is examined for a panel of manufacturing firms in nine African countries. The results indicate that exporters in these countries are more productive and, more importantly, exporters increase their productivity advantage after entry into the export market. While the first finding can be explained by selection–only the most productive firms engage in exporting–the latter cannot. The results are robust when unobserved productivity differences and self-selection into the export market are controlled for using different econometric methods. Scale economies are shown to be an important channel for the productivity advance. Credit constraints and contract enforcement problems prevent firms that only produce for the domestic market from fully exploiting scale economies.     

Internationalisation and Economic Performance of Enterprises: Evidence from Polish Firm‐level Data

This article provides evidence on the relative performance of internationalised firms using Polish firm‐level data, spanning the period 1996–2005 and covering all medium and large enterprises. We distinguish between three modes of internationalisation: foreign direct investment, exporting and importing of capital goods. Our results point strongly at the superior performance of foreign affiliates vs domestic firms, exporters vs non‐exporters, and importers vs non‐importers: internationalised firms are larger, more capital intensive, pay higher wages and are more productive than purely domestic firms. Foreign ownership is the strongest factor accounting for gains from internationalisation. The premia from exporting are substantially lower, though also significantly positive. The performance of capital goods importers is also higher compared to non‐importers and is to some extent related to their involvement in other types of international activity. The results are robust to the choice of specification and productivity estimator. The analysed enterprises recorded a sizeable and broad‐based productivity improvement over the period under consideration. Not only the initial levels of productivity of exporters, importers and foreign affiliates were on average significantly higher that those of their non‐internationalised counterparts, but they also recorded faster productivity gains (manifested in increasing productivity premia), so that the discrepancies grew even larger. We also perform the analysis of productivity spillovers from internationalised firms onto own, downstream and upstream sectors. We find evidence of significant horizontal and backward spillovers from all three types of international activity. Our results suggest that trade externalities are rather of a horizontal nature, while those related to foreign direct investment operate mainly via backward linkages.     

Export and Firm Performance: Evidence on Productivity and Profitability of Italian Companies

Empirical research in international trade has shown that exporting firms display higher productivity than their non-exporting competitors. This paper focuses on the relation between export and profitability. Our evidence on Italian exporting firms shows that exporting activity is not systematically associated to higher firm’s profitability. This is shown both by means of non-parametric methods and, with an approach that is more standard within the empirical trade literature, by regression techniques that try to identify an “export premium”.     

Foreign Market Competition as a Determinant of Exporter Performance: Evidence from Slovenian Manufacturing Firms

Most studies on the link between exporting status and firm productivity find no evidence of learning‐by‐exporting, whereas self‐selection of more productive firms into exporting is most often confirmed. Furthermore, empirical tests of the learning‐by‐exporting hypothesis rarely rely on a specific learning mechanism and instead estimate very general tests of the effects of exporting on improvements of firm efficiency. Lack of explicit controls for specific learning mechanisms in turn biases the empirical estimates against finding the learning effects. Here I undertake a more targeted approach to learning‐by‐exporting by using data on Slovenian manufacturing enterprises between 1994 and 2002 to explore a specific channel for learning in the export markets. Using a variety of empirical tests, I show that competition in exporting markets serves as an added criterion in firm self‐selection as only the most productive and fastest growing firms choose to enter more competitive foreign markets. Once home‐market competition is explicitly controlled, a significant productivity adjustment effect of exporting firms in response to intensification of export market competition is revealed. Crucially, this provides tentative evidence of learning‐by‐exporting, which has so far been elusive in the relevant literature.     

The Influence of IT Management Sophistication and IT Support on IT Success in Small and Medium‐Sized Enterprises

This study examined three factors that influence information technology (IT) success in small and medium‐sized enterprises (SMEs): internal IT support, external IT support, and IT management. Using survey data gathered from 289 small and medium‐sized Chartered Accounting firms in New Zealand, the results suggest that IT management in SMEs is best understood as a multidimensional concept consisting of practices related to: IT planning, IT organizing, IT controlling, and IT leading. This view clarifies and improves our understanding of the nature and character of IT management in SMEs. The results show that some SMEs are significantly more sophisticated than others in terms of their IT management practices. Both IT planning and IT leading were found to influence IT success.     

Globalization and firm level adjustment with imperfect labor markets

In a model with search generated unemployment and heterogeneity on both sides of the labor market, exporting firms are bigger and pay higher wages than other firms. Moreover, there is imperfect persistence in the decision to export and liberalization increases the wage gap between high- and low-skill workers. Openness can increase aggregate productivity in export-oriented markets while generating within-firm productivity losses for the weakest firms. In contrast, openness can lead to within-firm productivity gains for the weakest firms in import-competing industries.     

Do export status and export intensity increase firm performance?

This study examines the effects of export status and export intensity on the performance of firms in Ghana. Our measures of performance include productivity and profitability. Using the Regional Project on Enterprise Development (RPED) dataset covering the period 1991–2002, the results of this study indicate that export status and export intensity have positive effects on productivity, confirming the learning‐by‐exporting hypothesis. Competition on the international market exposes exporting firms to new technologies, and this has the potential of increasing their productivity. Thus, economic policy initiatives should be directed at encouraging firms to enter the export market. Existing exporters should also be motivated to intensify their exporting efforts by exporting more of their output to foreign markets. © 2011 Wiley Periodicals, Inc.     

Exporting raises productivity in sub-Saharan African manufacturing firms

Proponents of trade liberalization argue that exporting helps firms to achieve higher productivity levels. This hypothesis is examined for a panel of manufacturing firms in nine African countries. The results indicate that exporters in these countries are more productive and, more importantly, exporters increase their productivity advantage after entry into the export market. While the first finding can be explained by selection-only the most productive firms engage in exporting-the latter cannot. The results are robust when unobserved productivity differences and self-selection into the export market are controlled for using different econometric methods. Scale economies are shown to be an important channel for the productivity advance. Credit constraints and contract enforcement problems prevent firms that only produce for the domestic market from fully exploiting scale economies.     

Trading activities,productivity and markups: Evidence for Spanish manufacturing

This work analyses the firms' internationalisation strategies of importing intermediates and exporting output, and the potential rewards of these activities in terms of total factor productivity (TFP), as a proxy for marginal costs, and markups. It further deepens into the study of the relationship between internationalisation strategies and markups by disentangling whether it operates through affecting firms' marginal costs and/or firms' prices. The panel database employed in this paper is the Spanish Survey on Business Strategies (ESEE) for the period 2006–14. Results in the paper distinguish between SMEs and large firms and indicate that there is high persistence in the performance of these activities and in firms' TFP and markups. For SMEs, we obtain rewards from importing inputs as well as exporting output in terms of TFP and markups. For large firms, we obtain rewards in TFP from the importing activity and rewards in markups from the exporting activity. Finally, we find evidence that the effects of internationalisation strategies on markups are due to both a price channel and a marginal cost channel.     

Export Premia and Subcontracting Discount: Passive Strategies and Performance in Domestic and Foreign Markets

This paper contributes to the literature on firms’ productivity and exporting decisions by analysing the role played by organisational choice aspects. Rather than setting up a vertically integrated structure, manufacturers may act as subcontractors in both domestic and foreign markets, and produce to satisfy the requirements of other firms. The predictions that the most productive firms self‐select into exporting, whereas the least productive ones work as subcontractors serving the domestic market only, are tested on a sample of Italian firms observed during the 1998–2003 period. The results of our estimates highlight a ranking of firms consistent with a priori expectations, and provide a clear indication that passive exporters (i.e. those using subcontracting in foreign markets) display lower total factor productivity (TFP) values when compared with direct exporters. Moreover, only the latter category exhibits higher pre‐entry productivity levels and growth rates as well as higher post‐entry TFP growth rates. Such findings are consistent with both the self‐selection hypothesis and the learning‐by‐exporting explanation.     

Which manufacturing firms learn by exporting?

Using a longitudinal database (1996–2003) at the plant level, this article analyses the causal nexus between international trade engagement and productivity in Portugal. By applying the propensity score matching and a differences-in-differences estimator, the learning-by-exporting hypothesis is analysed in particular. A higher growth of labour productivity and total factor productivity is found for new exporting firms. To uncover the channels through which the learning effects are driven, the same methodology is applied to some sub-samples. Learning effects are higher for new exporters that are also importers or start importing at the same time. Other factors affecting learning ability are found in firms exporting to more developed markets, in those that achieve a certain threshold of export intensity and mainly for those firms that belong to sectors where Portugal has a comparative disadvantage.     

Learning from exporting: The moderating effect of technological capabilities

There is evidence that exporters are more productive than non-exporters. Scholars argue that exporters may have access to knowledge spillovers in foreign markets and use this knowledge to become more efficient. However, we know little about whether learning from exporting is affected by firms’ heterogeneous resource endowments and, particularly, about the specific firm characteristics that matter the most in this respect. Utilizing a sample of 1534 Spanish manufacturing firms from 1990 to 2002, we empirically analyze whether a firm's technological capabilities (proxied by its relative R&D expenditures) affect its ability to learn from the interaction with foreign agents. We find that firm productivity increases after exporting for all firms. However, ex post productivity improvements are larger for the more technologically advanced firms than they are for their less technologically advanced counterparts. Our results show that some firms stand to benefit more from exporting than others and hint at the importance of absorptive capacity for knowledge acquisition overseas.