Firm characteristics and export performance in Portuguese wine firms

Abstract

Purpose The purpose of this paper is to contribute to the determinants of export performance literature. The authors investigate the effect of firm characteristics on the Douro region wine firms export performance. The authors consider the Douro region, as it has the Portugal highest wine classification, the appellation d’origine contrôlée and undertakes the first position in the Portuguese wine production and export. Design/methodology/approach The authors apply a pooling cross-sectional data set that includes 427 observations. The authors pooled two cross sections consisting of 214 and 213 firms for the years 2014 and 215, respectively. The firm export intensity and propensity are the dependent variables. Moreover, the firm size, age and productive efficiency are accounted as the firm characteristics. The authors use the ordinary least squares regression and the tobit and probit models for estimations. Findings First, size is an influential factor to improve the export performance, and the importance of size is higher for younger firms. Second, there is a positive response from export intensity to age and this response is higher for smaller firms. However, there is a negative response from the export propensity to age and this negative response is higher for bigger firms. Third, there is weak evidence to support a relationship between efficiency and export performance. Research limitations/implications This research and the presented results are undoubtedly under some limitations. The main limitation is about the data availability for all characteristics of a firm. For example, it will enrich the result if the authors add some other important variables such as production cost, research and development expenditure and the quality of produced wine by each firm to our analysis. Originality/value This research reveals that the influence of firm characteristics on the export performance of Portuguese wine firms is missing in the literature. The results provide a basis to Portuguese wineries to improve their export performance by applying the relevant strategies.