Determinants of Export Performance: Comparison of Central European and Baltic Firms

Abstract

Following the new strand in the new trade theory literature focusing on firm heterogeneity in this paper we investigate the determinants of firms’ export performance in three Baltic states and four Central European countries (CECs). We start by estimating probit regressions for the pooled datasets that include these two groups of countries and then we disaggregate the samples into particular countries. The study covers Estonia, Latvia, Lithuania, the Czech Republic, Hungary, Poland and Slovakia and is based on BEEPS firm-level data collected for three years: 2002, 2005 and 2009. Our estimation results obtained for the Baltic and CECs indicate that the probability of exporting is positively related to the level of productivity, firm size, the share of university graduates in productive employment and the internationalization of firms. The results obtained for the two groups of countries are not statistically different, while results for particular countries reveal some degree of heterogeneity.

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