The impact of industry characteristics on firms’ export intensity

Abstract

Several authors have studied the factors that influence a firm’s export performance, but few have addressed the relationship between industry characteristics and export intensity. The objective of the present study was to analyze the impact of industry characteristics on a firm’s export intensity, the latter a measure commonly used to assess export performance, seeking to add empirical evidence to this relatively neglected research area. Based on a sample of 19,504 Portuguese manufacturing firms, 7,930 of which were exporting, during the period 2010–2013, and using panel data estimation, the empirical results show that some industry characteristics (labor productivity, export orientation, concentration), as well as characteristics of the firm (labor productivity, size and age of the firm) are important determinants of a firm’s export intensity. It is concluded in particular that a firm’s export intensity is positively affected by the export orientation of the industry, as well as by the firm’s labor productivity, confirming the belief that firms and governments need to direct their policies towards increased productivity in order to improve competitiveness in foreign markets. It is argued that, in order to enhance the positive effects of these policies, the policies should be directed towards industries with the highest export focus.

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