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Handbook of Research on European Business and Entrepreneurship

Handbook of Research on European Business and Entrepreneurship

Towards a Theory of Internationalization

Elgar original reference

Edited by Léo-Paul Dana, Isabell M. Welpe, Mary Han and Vanessa Ratten

This unique Handbook illustrates how entrepreneurs across Europe tackle internationalization. This timely and important book identifies patterns and builds a theory of international entrepreneurship in Europe.

Chapter 30: Export Performance and Productivity in Portuguese Manufacturing SMEs

Margarida Proença, Isabel Correia and Orlando Petiz

Subjects: business and management, entrepreneurship, international business


Margarida Proença, Isabel Correia and Orlando Petiz 1 Introduction This chapter examines the determinants of export propensity of Portuguese manufacturing SMEs. The most recent literature on firm’s internationalization tries to establish a relationship between performance, productivity and trade, assuming a model with heterogeneous firms. Applying quantile regression, this study supports the notion that firms are heterogeneous, and that exporting firms have higher productivity levels and are more technologically sophisticated than other firms in the same industry. International trade among industrial countries has, since World War II, risen at a faster rate than their national incomes. Almost every discussion of globalization and internationalization of production underlines the growing share of trade in output, the removal of barriers to trade and technical advances. In recent decades, considerable attention has been given to firm-level adjustment to international markets. From the product cycle model to the monopolistic advantage model of Hymer, the Uppsala School to the eclectic paradigm of Dunning and the transaction cost analysis, the literature is huge, but quite broad and poorly integrated and, in general, it does not take into account firm size. In fact, in most of this research, firms assumed to go international are large and mature, being the result of incremental decisions in the domestic markets (Johanson and Mattsson, 1988), a process, an evolution of the involvement in international operations (Welch and Luostarinen, 1988; Wind et al., 1973). In this debate, SMEs have been relegated to a minor role, which is in contrast to the European industry...

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