Exporting by Latvian companies: Vitality, drivers of success, and challenges

Publication Type:
Journal Article
Baltic Journal of Economics, 2013, 13 (2), pp. 5 - 35
Issue Date:
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This paper sheds light on Latvian exporters - how active they are, what challenges they face, what makes them succeed or fail. Our study draws on a survey of 503 medium-sized Latvian companies. We find that most medium-sized Latvian companies are exporters (either directly or indirectly) and for a typical exporting company, export turnover constitutes more than half of its total turnover. Exporting companies tend to be larger, younger and faster growing than their non-exporting counterparts. They pay higher average wages, consistent with the no-tion that they have higher labour productivity or utilise more skilled labour on average. For a typical company, export activity has been stable over the past five years, with zero growth in export turnover and an average increase of one additional export destination; however, there is wide dispersion in export growth and success among exporting companies. Success-ful exporters tend to be larger, with higher productivity growth and greater innovativeness, proactiveness and risk taking, i.e., stronger entrepreneurial orientation. The main obstacle preventing non-exporters from commencing exporting is lack of international competitive-ness. This is also the main reason why companies discontinue exporting, and should be the focus of policy aimed at promoting exporting.
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