Technology and Export Decision

Taiwan has played an important role in international trade in the world and its manufacturing industries are dominantly composed of SMEs, yet little is known about the export decision of Taiwanese SMEs, especially the role of technology. This paper aims to explore the role of technology on the export decision of Taiwanese SMEs. In addition, whether there are differences in the determinants of the export decision for different groups of SMEs classified by size is also discussed. The empirical results show that the technological capability embodied in firms, measured by R&D, technology import, and training investment, do increase the probability of exporting. There does exist some variations in the determinants of exports between SMEs of different sizes. The impact of R&D is significantly positive on export propensity in all SMEs, while the role of technology imports and training investment are evidenced for only small firms, implying that external technological sources and other R&D-related activities are particularly important on the formation of technological capability for small firms.