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No. 26: SMEs, Exports and Job Creation: A Firm-level Analysis

by Élisabeth Lefebvre and Louis A. Lefebvre, CIRANO and Polytechnique de Montréal, 2000


Abstract

The paper examines (1) the role and importance of innovative capabilities (on both the technological and commercial dimensions) as determinants of export performance and behaviour and (2) the link between exports and job creation. Empirical data from a longitudinal survey of 3032 manufacturing SMEs over a three-year period (1994–1997) indicate that these firms became increasingly active on foreign markets. Results from tobit and probit models also show that innovative capabilities are strong determinants of export performance and behaviour but their relative importance varies according to the knowledge intensity of the industrial sectors in which they are actively involved. In high-knowledge industries, all technological capabilities are significantly and positively related to export performance and behaviour, while commercial capabilities are more salient in low-knowledge industries. However, in either low-, medium- or high-knowledge industries, R&D and knowledge intensity remain among the five strongest determinants. This suggests that international competition is indeed knowledge-based. Finally, it is shown that an expansion in exports is associated with an increase in SMEs' workforce and that exports play a strong moderating role.

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