Firm size and export performance: Some empirical evidence
Staff research paper
This paper by Owen Gabbitas and Paul Gretton was released on 23 April 2003. The 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.
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Firm Size and Export Performance: Some Empirical Evidence - by chapters (ZIP 419.0 KB)Global and Australian exports have increased greatly over the last two decades. The range of products exported has also increased markedly, particularly in manufactured goods and services.
The growth and changing composition of exports has focused attention on the relationship between firm size, the size of firms' domestic base and export performance.
This study uses firm-level data from the Australian Business Longitudinal Survey (1994-95 to 1997-98) to form some tentative observations about these links.
On average, firm size and the magnitude of domestic sales were not found to be major influences on exporting by manufacturers once account was taken of other factors, although many significant exporters also happen to be larger firms.
While confined to a sample of manufacturing firms, this study does not support the proposition that to succeed internationally a firm will typically need to first secure a large domestic-sales base.
This study suggests that the main influences on export performance of Australian manufacturing firms are likely to lie with a range of 'firm-specific' factors. These potentially include the kind of activity, product design and quality, marketing expertise and the motivation of management.
Further research would be needed to clarify the linkages between 'size', other firm characteristics and exporting.
Background information
Paul Gretton (Assistant Commissioner) 02 6240 3252
