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
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: Suggested Citation