Agglomeration economies and firm’s export intensity: evidence from Portuguese manufacturing SMEs

Rosa Forte and Ana Medeiros (medeiros.ana10@gmail.com)
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Ana Medeiros: Universidade do Porto

Empirica, 2024, vol. 51, issue 3, No 9, 807-828

Abstract: Abstract Export performance is a highly debated topic in the literature, with no consensus on how to measure it or what factors determine it. Most studies divide these factors into internal and external determinants, with a focus on internal determinants. This study, however, focuses on external determinants, namely agglomeration economies such as localization and urbanization economies and export spillovers, and their impact on a firm’s export intensity. Based on a large sample of Portuguese manufacturing SMEs over the period 2010 to 2018 (191,920 firm/year observations), the estimation results through the two-stage least squares method with fixed effects strongly indicate the existence of a positive relationship between agglomeration economies, particularly localization economies and export spillovers, and export performance. These findings suggest that firms located in areas with a high concentration of other firms in the same industry and other exporting firms tend to have better export performance, which has important implications for policymakers.

Keywords: Export intensity; SMEs exports; Agglomeration economies; Portuguese manufacturing firms; Two-stage least squares; F14; D22; R12 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10663-024-09616-0

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