Determinants of Internationalization: Differences between Service and Manufacturing SMEs
AbstractThis paper empirically investigates the antecedents of internationalization of SMEs, focusing on differences between the manufacturing and service sectors. Specifically, employing a bivariate probit model based on survey data of approximately 3,900 East German firms, I analyze which firm-related and external factors affect a firm's decision to export and/or relocate production or other operations abroad. Generally, I find that SMEs from the manufacturing sector do more exporting than service firms. The results reveal that size, having main competitors located abroad, and introducing a novel product all are significantly positively related to the internationalization of SMEs regardless of industry affiliation. However, manufacturing firms in the high-tech sector are far more likely to be engaged in internationalization activity than are service firms, regardless of whether the latter are high-tech. Locational conditions and cooperation activities are generally less important for internationalization of service firms, too, compared to their manufacturing counterparts.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 886.
Length: 29 p.
Date of creation: 2009
Date of revision:
Internationalization; service; manufacturing; Bivariate Probit Model;
Find related papers by JEL classification:
- M16 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - International Business Administration
- M20 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - General
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-CSE-2009-05-23 (Economics of Strategic Management)
- NEP-ENT-2009-05-23 (Entrepreneurship)
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- Vogel , Alexander & Wagner, Joachim, 2012.
"Innovation and Exports of German Business Services Enterprises: First evidence from a new type of firm data,"
Working Paper Series in Economics and Institutions of Innovation
285, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Alexander Vogel & Joachim Wagner, 2012. "Innovation and Exports of German Business Services Enterprises: First evidence from a new type of firm data," Working Paper Series in Economics 246, University of Lüneburg, Institute of Economics.
- Spyros Arvanitis & Tobias Stucki & Heinz Hollenstein, 2013. "Determinants of Internationalisation – Do they Differ among Sectors and Business Functions? Evidence from Firm-level Data," KOF Working papers 13-348, KOF Swiss Economic Institute, ETH Zurich.
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