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Hidden champions - how young and small technology-oriented firms can attain high export-sales ratios

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  • Fryges, Helmut

Abstract

Determinants of a firm?s export-sales ratio (degree of internationalisation) are frequently discussed in the literature related to individual firms? export activities. Stylised facts show a positive relationship between firm size and firm age on the one hand and the firm?s export-sales ratio on the other hand. However, anecdotic evidence and recent empirical results revealed that it is not size or age per se that leads to a high export-sales ratio. This paper analyses the export-sales ratio of a sample of young technology-oriented firms in Germany and the UK. The empirical results confirm that neither youth nor smallness are necessarily an obstacle to realising a high degree of internationalisation. However, this requires that the firms possess firm-specific assets in order to overcome barriers to entry into the foreign market. These firm-specific assets may be acquired via conducting own R&D activities, buying novel technology from other companies, or by employing internationally experienced managers.

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  • Fryges, Helmut, 2006. "Hidden champions - how young and small technology-oriented firms can attain high export-sales ratios," ZEW Discussion Papers 06-045, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5435
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    Cited by:

    1. Klaus Nowotny & Peter Huber & Dieter Pennerstorfer, 2009. "Internationalisierungsstrategien von Dienstleistungsunternehmen am Standort Wien. Eine Individualdatenuntersuchung," WIFO Studies, WIFO, number 35701, April.
    2. Helmut Fryges & Joachim Wagner, 2021. "Exports and Productivity Growth — First Evidence from a Continuous Treatment Approach," World Scientific Book Chapters, in: Joachim Wagner (ed.), MICROECONOMETRIC STUDIES OF FIRMS’ IMPORTS AND EXPORTS Advanced Methods of Analysis and Evidence from German Enterprises, chapter 6, pages 57-86, World Scientific Publishing Co. Pte. Ltd..
    3. Schenkenhofer, Julian, 2020. "Hidden champions: A review of the literature & future research avenues," UO Working Papers 06-20, University of Augsburg, Chair of Management and Organization.
    4. Klaus Nowotny & Gerhard Palme, 2008. "Fokus Ostintegration: Grenzüberschreitende Dienstleistungserbringung in die neuen EU-Länder," WIFO Studies, WIFO, number 34222, April.
    5. Dirk Engel & Jochen Dehio & Roland Döhrn & Ronald Janßen-Timmen & Markus Scheuer & Joel Stiebale, 2007. "Internationalisierung der IT-Dienstleister - Eine Bestandsaufnahme," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 72, 06.
    6. Dieter Pennerstorfer, 2009. "FAMO I: Internationalisierung und Wahl der Markteintrittsform. Bestimmungsgründe und Unterschiede zwischen Unternehmen aus Wien und der Region Bratislava–Trnava," WIFO Studies, WIFO, number 37424, April.
    7. repec:zbw:rwimat:036 is not listed on IDEAS
    8. Cowling, Marc & Fryges, Helmut & Licht, Georg & Murray, Gordon, 2007. "The survival and growth of 'adolescent' high-tech firms in Germany and the UK, 1997-2003," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 110480, September.
    9. Rammer, Christian & Metzger, Georg, 2010. "Unternehmensdynamik in der Wissenswirtschaft in Deutschland und im internationalen Vergleich," Studien zum deutschen Innovationssystem 10-2010, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    10. Julian Schenkenhofer, 2022. "Hidden champions: a review of the literature & future research avenues," Management Review Quarterly, Springer, vol. 72(2), pages 417-482, June.
    11. Fryges, Helmut, 2006. "The Export-Growth Relationship: Estimating a Dose-Response Function," ZEW Discussion Papers 06-028, ZEW - Leibniz Centre for European Economic Research.
    12. Serrano, Raúl & Acero, Isabel, 2015. "Rethinking Entry Mode Choice of Agro-Exporters: The Effect of the Internet," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(3), pages 1-18, September.
    13. Metzger, Georg & Rammer, Christian, 2009. "Unternehmensdynamik in forschungs- und wissensintensiven Wirtschaftszweigen in Deutschland," Studien zum deutschen Innovationssystem 5-2009, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    14. Sugandha Huria & Kriti Sharma & Neha Jain & Ashley Jose, 2022. "Digitalization and Exports: A case of Indian Manufacturing MSMEs," Working Papers 2261, Indian Institute of Foreign Trade.
    15. Liu, Rebecca & Rammer, Christian, 2016. "The contribution of different public innovation funding programs to SMEs' export performance," ZEW Discussion Papers 16-078, ZEW - Leibniz Centre for European Economic Research.
    16. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    17. Rammer, Christian & Spielkamp, Alfred, 2019. "The distinct features of hidden champions in Germany: A dynamic capabilities view," ZEW Discussion Papers 19-012, ZEW - Leibniz Centre for European Economic Research.
    18. Engel, Dirk & Dehio, Jochen & Döhrn, Roland & Janßen-Timmen, Ronald & Scheuer, Markus & Stiebale, Joel, 2007. "Internationalisierung der IT-Dienstleister: Eine Bestandsaufnahme," RWI Materialien 36, RWI - Leibniz-Institut für Wirtschaftsforschung.
    19. Evgeniy Kutsenko & Kirill Tyurchev & Tatyana Ostashchenko, 2022. "Relocation as a Driver of Innovative Activity: A Global Study of Unicorn Founders’ Migration," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 16(4), pages 6-23.

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    More about this item

    Keywords

    High-technology industries; export-sales ratio; fractional logit model;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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