Determinants of Internationalization: Differences between Service and Manufacturing SMEs
Anna Lejpras ()
No 886, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
This paper empirically investigates the antecedents of internationalization of SMEs, focusing on differences between the manufacturing and service sectors. Specifically, employing a bivariate probit model based on survey data of approximately 3,900 East German firms, I analyze which firm-related and external factors affect a firm's decision to export and/or relocate production or other operations abroad. Generally, I find that SMEs from the manufacturing sector do more exporting than service firms. The results reveal that size, having main competitors located abroad, and introducing a novel product all are significantly positively related to the internationalization of SMEs regardless of industry affiliation. However, manufacturing firms in the high-tech sector are far more likely to be engaged in internationalization activity than are service firms, regardless of whether the latter are high-tech. Locational conditions and cooperation activities are generally less important for internationalization of service firms, too, compared to their manufacturing counterparts.
Keywords: Internationalization; service; manufacturing; Bivariate Probit Model (search for similar items in EconPapers)
JEL-codes: M16 M20 L25 R30 O30 (search for similar items in EconPapers)
Pages: 29 p.
New Economics Papers: this item is included in nep-cse and nep-ent
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp886
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