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Determinants of Internationalization: Differences between Service and Manufacturing SMEs

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Author Info
Anna Lejpras

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Abstract

This 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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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.97798.de/dp886.pdf
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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 886.

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Length: 29 p.
Date of creation: 2009
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Handle: RePEc:diw:diwwpp:dp886

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Related research
Keywords: 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, and Regional Economics - - Production Analysis and Firm Location - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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This page was last updated on 2009-11-26.

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