IDEAS home Printed from https://ideas.repec.org/a/bla/buecrs/v77y2025i3p385-397.html

Self‐Selection Versus Trial‐and‐Error of Exporting: Evidence From SMEs

Author

Listed:
  • Mohammad Movahedi
  • Kiumars Shahbazi

Abstract

This article presents an empirical analysis of export entry process of small‐ and medium‐sized enterprises (SMEs) by evaluating two mechanisms: self‐selection and trial‐and‐error of exporting. We build a recursive non‐linear model in which the likelihood of permanent export entry over the period 2009–2012 depends on export trials and the predicted productivity stemming from innovation activities, both over the previous period. Our sample of French SMEs from Community Innovation Survey (CIS 2008) strongly supports the mechanism of trial‐and‐error of exporting and the crucial role of different types of innovation in labor productivity without upholding the mechanism of self‐selection. However, productivity favors occasional entry, suggesting a potential new and more complete SMEs export entry mechanism. Furthermore, we show evidence of the simultaneous existence of accelerated and gradual export entry. The results are confirmed using a second sample of Normandy SMEs from the interdisciplinary project on enterprise development, innovation, and strategy (IDEIS) project that provides highly pertinent information on SMEs’ innovation and export activities.

Suggested Citation

  • Mohammad Movahedi & Kiumars Shahbazi, 2025. "Self‐Selection Versus Trial‐and‐Error of Exporting: Evidence From SMEs," Bulletin of Economic Research, Wiley Blackwell, vol. 77(3), pages 385-397, July.
    • Handle: RePEc:bla:buecrs:v:77:y:2025:i:3:p:385-397
    DOI: 10.1111/boer.12494
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/boer.12494
    Download Restriction: no
    File URL: https://libkey.io/10.1111/boer.12494?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    2. João Amador & Luca Opromolla, 2013. "Product and destination mix in export markets," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 23-53, March.
    3. Ayyagari, Meghana & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2011. "Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(6), pages 1545-1580, December.
    4. Andersson, Martin & Johansson, Borje & Karlsson, Charlie & Loof, Hans (ed.), 2012. "Innovation and Growth: From R&D Strategies of Innovating Firms to Economy-wide Technological Change," OUP Catalogue, Oxford University Press, number 9780199646685.
    5. Movahedi, Mohammad & Shahbazi, Kiumars & Gaussens, Olivier, 2017. "Innovation and willingness to export: Is there an effect of conscious self-selection?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 11, pages 1-22.
    6. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    7. repec:cup:jfinqa:v:46:y:2011:i:06:p:1545-1580_00 is not listed on IDEAS
    8. Coad, Alex & Segarra, Agustí & Teruel, Mercedes, 2013. "Like milk or wine: Does firm performance improve with age?," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 173-189.
    9. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    10. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    11. Nicholas Sheard, 2014. "Learning to Export and the Timing of Entry to Export Markets," Review of International Economics, Wiley Blackwell, vol. 22(3), pages 536-560, August.
    12. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    13. Hallak, Juan Carlos & Sivadasan, Jagadeesh, 2013. "Product and process productivity: Implications for quality choice and conditional exporter premia," Journal of International Economics, Elsevier, vol. 91(1), pages 53-67.
    14. Johnson, Robert C., 2012. "Trade and prices with heterogeneous firms," Journal of International Economics, Elsevier, vol. 86(1), pages 43-56.
    15. Schmeiser, Katherine N., 2012. "Learning to export: Export growth and the destination decision of firms," Journal of International Economics, Elsevier, vol. 87(1), pages 89-97.
    16. Per Botolf Maurseth & Hege Medin, 2017. "Market-specific Sunk Export Costs: The Impact of Learning and Spillovers," The World Economy, Wiley Blackwell, vol. 40(6), pages 1105-1127, June.
    17. Ilke Van Beveren & Hylke Vandenbussche, 2010. "Product and process innovation and firms' decision to export," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 3-24.
    18. Aeberhardt, Romain & Buono, Ines & Fadinger, Harald, 2014. "Learning, incomplete contracts and export dynamics: Theory and evidence from French firms," European Economic Review, Elsevier, vol. 68(C), pages 219-249.
    19. Nguyen, Daniel X., 2012. "Demand uncertainty: Exporting delays and exporting failures," Journal of International Economics, Elsevier, vol. 86(2), pages 336-344.
    20. Joachim Wagner, 2016. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 2, pages 43-87, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Movahedi, Mohammad, 2013. "Le commerce international, l’adoption de l’innovation et le choix de l’entrée-sortie à l’exportation des firmes [International trade, innovation adoption and export entry-exit choice of the firms]," MPRA Paper 44268, University Library of Munich, Germany, revised 01 Jan 2014.
    2. Movahedi, Mohammad & Shahbazi, Kiumars & Abdessalam, Ahmed Haidara Ould, 2019. "Firms' export decisions: Selection versus trial-and-error," Economics Discussion Papers 2019-58, Kiel Institute for the World Economy.
    3. Patrick Plane & Marie-Ange Véganzonès-Varoudakis, 2019. "Innovation, productivity, exports and the investment climate: A study based on Indian manufacturing firm-level data," Post-Print halshs-02137297, HAL.
    4. Enrique López-Bazo & Elisabet Motellón, 2013. "“Firm exports, innovation, … and regions”," AQR Working Papers 201305, University of Barcelona, Regional Quantitative Analysis Group, revised May 2013.
    5. Messaoud Zouikri & Mounir Amdaoud, 2018. "Compétences externes et innovation: le cas des firmes de l'industrie manufacturière algérienne," EconomiX Working Papers 2018-37, University of Paris Nanterre, EconomiX.
    6. repec:dau:papers:123456789/6060 is not listed on IDEAS
    7. Konstantins Benkovskis & Jaan Masso & Olegs Tkacevs & Priit Vahter & Naomitsu Yashiro, 2020. "Export and productivity in global value chains: comparative evidence from Latvia and Estonia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 557-577, August.
    8. Movahedi, Mohammad & Shahbazi, Kiumars & Gaussens, Olivier, 2017. "Innovation and willingness to export: Is there an effect of conscious self-selection?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 11, pages 1-22.
    9. M.-A. Véganzonès-Varoudakis & P. Plane, 2019. "Innovation, exports, productivity and investment climate; a study based on Indian manufacturing firm-level data," Applied Economics, Taylor & Francis Journals, vol. 51(41), pages 4455-4476, September.
    10. Peters, Bettina & Roberts, Mark J. & Vuong, Van Anh, 2022. "Firm R&D investment and export market exposure," Research Policy, Elsevier, vol. 51(10).
    11. Juan Blyde & Gonzalo Iberti & Micaela Mussini, 2018. "When does innovation matter for exporting?," Empirical Economics, Springer, vol. 54(4), pages 1653-1671, June.
    12. Movahedi, Mohammad & Shahbazi, Kiumars, 2020. "Firms' export decisions: Self-selection versus trial-and-error," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 14, pages 1-15.
    13. Massimiliano Bratti & Giulia Felice, 2012. "Are Exporters More Likely to Introduce Product Innovations?," The World Economy, Wiley Blackwell, vol. 35(11), pages 1559-1598, November.
    14. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    15. Bas, M. & Paunov, C., 2014. "The unequal effect of India's industrial liberalization on firms' decision to innovate: Do business conditions matter?," MERIT Working Papers 2014-044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Movahedi, Mohammad & Gaussens, Olivier, 2011. "Innovation, productivity, and export: Evidence from SMEs in Lower Normandy, France," MPRA Paper 40443, University Library of Munich, Germany, revised 07 Jun 2012.
    17. Rammer, Christian, 2022. "Measuring process innovation output: Results from firm-level panel data," ZEW Discussion Papers 22-002, ZEW - Leibniz Centre for European Economic Research.
    18. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2018. "Internationalisation, innovation and productivity in services: evidence from Germany, Ireland and the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(3), pages 585-615, August.
    19. Redha Fares & Amélie Guillin, 2022. "R&D expenditures and firm survival," Erudite Working Paper 2022-04, Erudite.
    20. Esra Balli & Çiler Sigeze, 2017. "The Nexus Between Research And Development And Export Decision: The Case Of Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 11(1), pages 34-41, December.
    21. Peters, Bettina & Riley, Rebecca & Siedschlag, Iulia & Vahter, Priit & McQuinn, John, 2014. "Innovation and Productivity in Services:Evidence from Germany, Ireland and the United Kingdom," Papers WP480, Economic and Social Research Institute (ESRI).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:buecrs:v:77:y:2025:i:3:p:385-397. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.