Transition in-and-out of exporting and its impact on employment growth

Abstract

Purpose The purpose of this paper is to evaluate how different strategic choices related to the transitions in-and-out of exporting (export entry, export persistence, export exit) impact employment growth in Romanian small- and medium-sized businesses. Design/methodology/approach Using linear regression models on a sample of 566 Romanian SMEs, The authors model employment growth as a function of three different dimensions of foreign market participation: export entry, persistence and exit. Findings Results indicate that exporting is positively associated with employment growth. The findings reveal that the different strategic choices linked to exporting have a differentiating impact on employment growth: while employment growth is more pronounced among new exporters which points to the presence of an impulse effect of exporting, businesses that interrupt their exporting activities report employment losses. Research limitations/implications This study underlines the relevance of distinguishing the specific impact of the different export behaviours related to the transitions in-and-out of exporting. Practical implications The results of the study fuel the debate on the relevance of promoting policies that encourage exporting among small businesses operating in emerging economies. Originality/value This study presents an original analysis of the distinctive effect that different forms of export behaviour related to the transitions in-and-out of exporting have on employment growth. The relevance of this study not only flows from the particular empirical design that simultaneously evaluates different export choices and their specific impact on employment growth.