Networks and export performance of agri-food firms: New evidence linking micro and macro determinants

Abstract

The paper complements a new line of research that includes the firm heterogeneity in trade models. The central idea of this research is that only the largest and most efficient firms are capable of exporting. However, the empirical evidence has confirmed that a large number of SMEs is also involved in internationalisation. Given this context, the aim of the paper is to analyse the influence of collaborative networks between firms and institutions as an alternative mechanism to the small size of the majority of the firms in the agri-food industry. To this end, there was used a longitudinal panel between 1994 and 2012 comprising a sample of 342 Spanish firms involved in the business sectors of the food, meat, drink and tobacco industries, and a dynamic Heckman-Probit model was implemented. The first stage studies the positive influence of collaborative networks in firms' decision to export and the second stage analyses the effect of cooperation mechanisms on export intensity. The results show a positive effect of business cooperation networks in both stages suggesting that SMEs can overcome the barrier of their small size in their internationalisation process through other mechanisms, such as collaborative networks.

Keywords

• agribusiness
• export performance
• firm heterogeneity
• gravity equation
• heckman model
• internationalisation
• networks