Performance of small and mediumsized enterprises

Authors: Iza Lejárraga Harald Oberhofer

Publish Date: 2015/02/20

Volume: 45, Issue: 3, Pages: 673-702

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Abstract

This paper empirically investigates the key firm and industryspecific restrictions to the performance of small and mediumsized enterprises SMEs in services trade For this purpose we use firmlevel data from firms in France operating in different services sectors over the time period 1998–2007 and formulate twopart models consisting of 1 dynamic export equations and 2 dynamic export share equations Our results confirm the view that a relatively low share of SMEs engages in services trade In line with the newnew trade theory our results also corroborate that more productive SMEs have a higher export probability The key finding of this paper is that the export decisions of SMEs in services sectors are estimated to be extremely persistent implying that trade policy efforts including the allocation of scarce trade promotion budgets should be directed at addressing the barriers faced in establishing the first export operation Finally our subsectoral estimates reveal considerable heterogeneity across different types of servicesDisclaimer This paper builds on an earlier analysis that was published as part of the OECD Trade Policy Paper No 165 ”Small and mediumsized enterprises in global markets A differential approach for services” Lejárraga et al 2014 The opinions expressed and arguments employed herein are those of the authors and do not necessarily reflect the official views of the OECD or of the governments of its member countriesWe would like to thank Rui Baptista two anonymous referees the participants of the 5th FIW research conference in International Economics at the Vienna University of Economics and Business the participants of the FIWWIIW research seminar in International economics and the participants of the InterAmerican Development BankELSNIT XI Annual Conference on “Internationalisation of SMEs” The authors also thank the OECD Working Party of the Trade Committee and the OECD Working Party on SMEs and Entrepreneurship for useful comments and discussions

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