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Human Capital and Export Decisions: The Case of Small and Medium Enterprises in Kosovo

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  • Petrit Gashi

    (Faculty of Economics, University of Prishtina, Kosovo)

Abstract

Following the propositions of firm internationalization theories including the Melit’z dynamic model of export participation, this paper investigates the effects of human capital on the export decisions of Kosovo’s firms. Using a unique dataset of around 500 Small and Medium Enterprises, econometric estimates show mixed indications regarding the relationship between the propensity to export and longevity in export markets and human capital variables, measured by the education of the workforce, and investment in training. While education generally has a negative effect on exporting decisions, the latter shows a consistent positive effect. In the context of Kosovo, this dichotomy may reflect in part the effect of the underperforming education system in Kosovo, which does not produce the right level and/or mix of skills required by the private sector; this, in turn, forces SMEs to invest in increasing workforce capacities. Another explanation may indicate the lack of demand for a better skilled workforce, either because of associated high costs, or because a significant number of firms in Kosovo operate in low-value activities that do not require advanced skills and knowledge. Other factors that affect the decisions of firms to enter and serve export markets are found to be firm size, experience, growth, and adoption of quality standards.

Suggested Citation

  • Petrit Gashi, 2014. "Human Capital and Export Decisions: The Case of Small and Medium Enterprises in Kosovo," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 16(2), pages 91-120, December.
    • Handle: RePEc:iez:survey:ces-v16_12-2014_gashi
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    References listed on IDEAS

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    9. Manuela Francisco & Paulo Correa & Mariam Dayoub, 2007. "Exchange Rate Pass-Through in ASEAN: Identifying Supply-Side Constraints to Export Performance in Ecuador: An Exercise with Investment Climate Survey Data," NIPE Working Papers 1/2007, NIPE - Universidade do Minho.
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    Cited by:

    1. Kotorri Mrika & Krasniqi Besnik A., 2018. "Managerial Characteristics and Export Performance – Empirical Evidence from Kosovo," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 32-48, December.

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    More about this item

    Keywords

    Kosovo; export decisions; human capital; productivity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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