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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.

Suggested Citation

  • Fryges, Helmut, 2006. "Hidden champions - how young and small technology-oriented firms can attain high export-sales ratios," ZEW Discussion Papers 06-045, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:5435
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    References listed on IDEAS

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    Cited by:

    1. Fryges, Helmut, 2006. "The Export-Growth Relationship: Estimating a Dose-Response Function," ZEW Discussion Papers 06-028, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Helmut Fryges & Joachim Wagner, 2008. "Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 695-722, December.
    3. 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 - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 110480.

    More about this item

    Keywords

    High-technology industries; export-sales ratio; fractional logit model;

    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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