Hidden Champions - How Young and Small Technology-Oriented Firms Can Attain High Export-Sales Ratios

33 Pages Posted: 13 Jul 2006 Last revised: 26 Aug 2008

See all articles by Helmut Fryges

Helmut Fryges

Technopolis Group; University of Tasmania - Australian Innovation Research Centre; Center for European Economic Research (ZEW)

Date Written: 2006

Abstract

Determinants of a firm's export-sales ratio (degree of internationalisation) are frequently discussed in the literature related to individual firms' export activities. Stylised facts show a positive relationship between firm size and firm age on the one hand and the firm's export-sales ratio on the other hand. However, anecdotic evidence and recent empirical results revealed that it is not size or age per se that leads to a high export-sales ratio. This paper analyses the export-sales ratio of a sample of young technology-oriented firms in Germany and the UK. The empirical results confirm that neither youth nor smallness are necessarily an obstacle to realising a high degree of internationalisation. However, this requires that the firms possess firm-specific assets in order to overcome barriers to entry into the foreign market. These firm-specific assets may be acquired via conducting own R&D activities, buying novel technology from other companies, or by employing internationally experienced managers.

Keywords: High-technology industries, export-sales ratio, fractional logit model

JEL Classification: F23, L60, L86

Suggested Citation

Fryges, Helmut, Hidden Champions - How Young and Small Technology-Oriented Firms Can Attain High Export-Sales Ratios (2006). ZEW - Centre for European Economic Research Discussion Paper No. 06-045, Available at SSRN: https://ssrn.com/abstract=913947 or http://dx.doi.org/10.2139/ssrn.913947

Helmut Fryges (Contact Author)

Technopolis Group ( email )

Grosse Seestra├če 26
Frankfurt am Main, 60384
Germany

University of Tasmania - Australian Innovation Research Centre ( email )

1 College Road
Sandy Bay TAS, Tasmania 7005
Australia

HOME PAGE: http://www.utas.edu.au/airc

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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