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The role of firm location and agglomeration economies on export propensity: the case of Portuguese SMEs

Rosa Portela Forte (Faculty of Economics, University of Porto, Porto, Portugal and CEF.UP, Porto, Portugal)
Ana Rita (Faculty of Economics, University of Porto, Porto, Portugal)

EuroMed Journal of Business

ISSN: 1450-2194

Article publication date: 8 August 2020

Issue publication date: 8 June 2021

363

Abstract

Purpose

The present study seeks to assess whether the firm's location and agglomeration economies affect the firm's export propensity.

Design/methodology/approach

This work is based on a sample of 20,234 Portuguese manufacturing small and medium enterprises (SMEs) and resort to the estimation of a probit model.

Findings

Empirical results show that the location and agglomeration economies have an important role in determining the firm's export propensity. In particular, the study concludes that SMEs located in coastal areas or close to the border are more likely to export. Furthermore, the study also concludes that specialization economies are an important driver of small and medium-sized firms' export propensity while export spillovers are particularly relevant for micro firms. However, urbanization, measured through firms density in NUTS3 region, negatively affects firms' export propensity, which may be due to high congestion costs in the regions with a high firms density.

Originality/value

This study focus on the determinants of the decision to export or the export propensity, particularly the external factors such as the firm's location and agglomeration economies. This is a relatively neglected topic in the literature that has focused on the determinants of export intensity.

Keywords

Citation

Forte, R.P. and Sá, A.R. (2021), "The role of firm location and agglomeration economies on export propensity: the case of Portuguese SMEs", EuroMed Journal of Business, Vol. 16 No. 2, pp. 195-217. https://doi.org/10.1108/EMJB-02-2020-0011

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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