Learning by exporting : Lessons from high-technology SMEs

Theory points to the existence of a ‘learning by exporting effect’, in which exposure to export markets enhances performance through exposure to the knowledge stocks of trading partners. We investigate the learning by exporting hypothesis by examining the effect of exporting on the subsequent innovation performance of UK high-tech SMEs. We find evidence of learning by exporting, but the pattern of this effect is relatively complex. Exporting helps high-tech SMEs innovate subsequently, but does not make them more innovation intensive. There is also evidence that it is consistent exposure to export markets that helps firms overcome the innovation hurdle, but that there is a positive scale effect of exposure to export markets which allows innovative firms to sell more of their new-to-market products on entering export markets. Service sector firms are able to reap the benefits of exposure to export markets at an earlier (entry) stage of the internationalization process than are manufacturing firms. Firms producing a rapidly changing portfolio of innovative products exhibit higher ‘churn’ in terms of entry to and exit from export markets than low-intensity innovators, and this is reflected in the effects of entry and exit into and out of such markets.