Foreign Market Experience, Learning by Hiring and Firm Export Performance

The University of Tartu Faculty of Economics and Business Administration Working Paper No. 95-2014

30 Pages Posted: 20 Jul 2014

See all articles by Jaan Masso

Jaan Masso

University of Tartu - Faculty of Economics and Business Administration

Kärt Rõigas

University of Tartu

Priit Vahter

University of Tartu - Faculty of Economics and Business Administration

Date Written: July 19, 2014

Abstract

Export experience of managers and other top specialists is among the key drivers of export decisions in firms. We show evidence of this regularity based on employer-employee level data from the manufacturing industry in Estonia. We find that hiring managers and other high-wage employees with prior experience in exporting to a specific geographical region is associated with a higher probability of export entry to that region. However, there is little evidence of significant effects on export intensity. Notably, the relationship between export experience and a firm’s export decisions is usually stronger if the prior export experience is from an exporter that is located nearby in the product space. Our findings suggest that the contribution of prior trade experience of employees and the firm’s productivity as drivers of export market entry are of comparable magnitude.

Keywords: export experience, export entry, labour mobility, learning-to-export

JEL Classification: F10, F14, J31

Suggested Citation

Masso, Jaan and Rõigas, Kärt and Vahter, Priit, Foreign Market Experience, Learning by Hiring and Firm Export Performance (July 19, 2014). The University of Tartu Faculty of Economics and Business Administration Working Paper No. 95-2014, Available at SSRN: https://ssrn.com/abstract=2468603 or http://dx.doi.org/10.2139/ssrn.2468603

Jaan Masso

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4-A110
Tartu 51009
Estonia
+ 372 7 375 842 (Phone)

Kärt Rõigas

University of Tartu ( email )

Ülikooli 18
Tartu, 50090
Estonia

Priit Vahter (Contact Author)

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Rd. 4-A214
Tartu 51009, 51009
Estonia

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