Firm Size and Export Performance: Some Empirical Evidence

Firm size and the magnitude of domestic sales are generally not major influences on the export performance of manufacturers once account is taken of other factors, according to research by Productivity Commission staff.

The staff research paper uses firm-level data to provide information about the relationship between firm size, domestic sales and export performance for a sample of Australian manufacturing firms.

The paper’s findings do not support the proposition that to succeed internationally a firm will typically need first to secure a large domestic-sales base.

The paper suggests that the main influences on export performance are likely to involve a range of other ‘firm-specific’ factors, including kind of activity, product design and quality, marketing expertise and the motivation of management.