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.

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Preliminaries
Cover, Copyright, Contents, Acknowledgements, Abbreviations and explanations

Summary
Key points, Summary

1 Introduction

2 Trends in exports
2.1 Global trends
2.2 Australian trends
2.3 Exporting by Australian firms
2.4 Summing up

3 Selected empirical studies
3.1 Main findings
3.2 Possible non-linear relationships between firm size and exporting
3.3 Summing up

4 Size in the domestic market, firm size and export performance
4.1 Export participation
4.2 Extent of export involvement
4.3 The relative importance of firm size
4.4 Summing up

A Firm-level data source
A.1 Business Longitudinal Survey

B Variables from the Business Longitudinal Survey
B.1 Variables used in regression analyses
B.2 Additional analysis

C Model outline and detailed results
C.1 Binary choice analysis
C.2 Panel data analysis
Technical annex 1 Binary choice (logistic) regressions
Technical Annex 2 Panel data regressions

References