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Export and Innovation in SMEs and Large Firms: The main determinants

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  • Ana Rita Gomes
  • Horácio Crespo Faustino

Abstract

This study analyses the main determinants of exports and research and development (R&D) expenses of small and medium enterprises (SME) and large companies operating in Portugal during the period 2004- 2008. From a sample of 200 SMEs and 30 major exporting companies, the study uses a panel data analysis and fixed-effects and random-effects estimators to estimate the effects on exports and on R & D. Regarding exports, the study found a positive effect in terms of increased productivity and R & D in both SMEs and large companies. The results also suggest that SMEs that are owned by foreign enterprises export more than national SMEs. In relation to the determinants of spending on R & D, the study concludes that the increase in equity and net income has a positive effect on R & D spending in large companies, while in SMEs, increased expenditure on R & D is a consequence of increasing exports, whereas the increase in net income has a negative effect on R& D

Suggested Citation

  • Ana Rita Gomes & Horácio Crespo Faustino, 2011. "Export and Innovation in SMEs and Large Firms: The main determinants," Working Papers Department of Economics 2011/02, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp022011
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    File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp022011.pdf
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    References listed on IDEAS

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    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Basile, Roberto, 2001. "Export behaviour of Italian manufacturing firms over the nineties: the role of innovation," Research Policy, Elsevier, vol. 30(8), pages 1185-1201, October.
    3. Chadha, Alka, 2009. "Product Cycles, Innovation, and Exports: A Study of Indian Pharmaceuticals," World Development, Elsevier, vol. 37(9), pages 1478-1483, September.
    4. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 190-207.
    5. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
    6. Wakelin, Katharine, 1998. "Innovation and export behaviour at the firm level," Research Policy, Elsevier, vol. 26(7-8), pages 829-841, April.
    7. Jože P. Damijan & Črt Kostevc, 2006. "Learning-by-Exporting: Continuous Productivity Improvements or Capacity Utilization Effects? Evidence from Slovenian Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(3), pages 599-614, October.
    8. Aggarwal, Raj & Kyaw, NyoNyo A., 2008. "Internal capital networks as a source of MNC competitive advantage: Evidence from foreign subsidiary capital structure decisions," Research in International Business and Finance, Elsevier, vol. 22(3), pages 409-439, September.
    9. Hans Lööf, 2009. "Multinational enterprises and innovation: firm level evidence on spillover via R&D collaboration," Journal of Evolutionary Economics, Springer, vol. 19(1), pages 41-71, February.
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    Cited by:

    1. Horácio C. Faustino & Joana C. Lima & Pedro Verga Matos, 2012. "Exports, Productivity and Innovation: Evidence from Portugal using micro data," Working Papers Department of Economics 2012/13, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.

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    Keywords

    Exports; R & D; Enterprise; SME; Panel Data; Portugal;

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