Export starters and exiters: Do innovation and finance matter?
Stefania Patrizia Sonia Rossi,
Graziella Bonanno (),
Marco Giansoldati and
Structural Change and Economic Dynamics, 2021, vol. 56, issue C, 280-297
Using European Central Bank restricted-access biannual data on European small- and medium-sized enterprises (SMEs) over the period 2014–2017, we analyze the impact that innovation, financial constraints, and an efficient regulatory environment exert on the probability of switching from the status of nonexporter to exporter and vice versa. We find that either the use of finance for innovation or undertaking product innovation increases the likelihood of starting to export and lowers the likelihood of stopping exporting. Although SMEs’ financial frictions are negligible for foreign market entry, they matter for increasing the probability of exiting. We also document that a friendly regulatory environment is conducive to start—but not to stop—exporting. Our findings provide empirical support for the recent European Commission policies on both SMEs’ internationalization and access to finance.
Keywords: Export starter and export exiter; Innovation; Credit access; Financial frictions; European SMEs (search for similar items in EconPapers)
JEL-codes: F14 G32 L25 O31 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:56:y:2021:i:c:p:280-297
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