The impact of technological and non-technological innovations on export intensity in SMEs.

Abstract

Purpose: This study investigates how both technological and non-technological innovations influence export intensity in small and medium-sized enterprises (SMEs). In addition, we report results for each firm size category of micro, small and medium firms, and thus reflect SME heterogeneity. Design/methodology/approach: The research methodology is based on the analysis of the Eurobarometer 2014 dataset from 28 EU Member States, Switzerland and the United States covering the period 2011-2014. To statistically test the three defined research hypotheses on individual and joint effects of both types of innovation, a multiple treatment model was estimated. The advantage of this empirical strategy is that it takes into account endogeneity of both technological and non-technological innovations. Moreover, we employ the production approach or the direct test of complementarity between technological and non-technological innovations. Findings: Empirical findings indicate that technological innovations positively affect export intensity in small and medium firms, while non-technological innovations exert no influence on export intensity, regardless of the firm size. Moreover, the results from the direct test suggest no evidence of the complementary effects of technological and non-technological innovation on export intensity.Implications: We infer that SMEs would benefit more from public support targeting both exports and innovations than micro firms, as the sunk costs of exports are too high for the latter. However, public support aimed at reducing fixed costs of exports could be particularly beneficial for micro firms. Originality/value: The research fills a literature gap on the joint impact of technological and non-technological innovations on export intensity while taking into account endogeneity of innovation activities and SME heterogeneity.