Does firms and managerial experience matter for exporting? The case of selected EU member and non-member countries

Abstract

PurposeThe main goal of this paper is to study empirically the importance of experience of top managers and firms for export performance, having controlled for a number of firm characteristics.Design/methodology/approachThe study is based on the probit model applied to the 2020 edition of the BEEPS firm level survey. The authors analyze firms in 15 EU member and 15 non-member countries.FindingsThe results indicate that firm experience can increase the probability of direct exporting, but is not significant for indirect exporting. The results also support the importance of interaction between experience of managers and experience of firms. The authors conclude that only the combination of managerial and firm experience can have a positive and significant effect for direct exporting. This relationship is more pronounced in the case of EU members.Research limitations/implicationsThe main limitations of our approach are related to data constraints. These include availability of only cross-sectional data and the limited number of individual characteristics of managers.Practical implicationsThe importance of experience for exporting suggests that firms can break into foreign markets by hiring more experienced managers.Social implicationsPost-communist countries can improve their export performance by hiring more experienced managers that would stimulate direct exports. Moreover, they can also export indirectly through intermediaries.Originality/valueIn contrast to previous studies, the authors used a model proposed by Jørgensen and Schroder (2008) in which the authors endogenized the costs of exporting by linking them to firm and managerial experience. Then, the authors validated empirically the importance of experience for firm export performance, having controlled for the set of individual firm characteristics.