Knowledge, location, and internationalization: Empirical evidence for manufacturing SMEs

Arbeitspapier

This paper investigates the links between locational conditions, innovative capabilities and internationalization of manufacturing SMEs. Two modes of foreign market servicing are explored: exporting activity and relocating of selected business activities abroad. The empirical analysis employs two probit models based on survey of about 3,000 firms. The results reveal that the outputs of SMEs' innovative activities-i.e., product innovations and patent applications-enhance exporting propensity as expected. Nevertheless, the input-side indicator-R&D intensity-appears to exert no impact. Further, the locational factor proximity to research institutions promotes SMEs' engagement in exporting. Regarding the determinants of selective relocations abroad, the findings show that SMEs with a high degree of R&D are less likely to separate production from other operations and relocate it abroad. Moreover, manufacturing SMEs assessing the proximity to research facilities, as well as support from various regional authorities and other bodies as important and good-quality locational conditions, exhibit a significantly lower likelihood to relocate selected activities abroad. Indeed, emphasizing the role of institutional setting in firm activity, our findings coincide in this respect with the previous literature focused on innovative milieu, learning regions and regional innovation systems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1229

Classification and Topics

• Classification: Wirtschaft ; Real Estate Markets, Spatial Production Analysis, and Firm Location: General ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; International Business Administration ; Firm Performance: Size, Diversification, and Scope
• Subject: Export ; innovation ; location ; manufacturing SMEs ; selective relocation abroad

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lejpras, Anna
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/61332
• Last update: 10.03.2025, 11:42 AM CET