International Involvement and Production Efficiency among Startup Firms

Author(s)

Hyungkee Young Baek, Nova Southeastern UniversityFollow
Florence Neymotin, Nova Southeastern UniversityFollow

Document Type

Article

Publication Title

Global Economic Review

ISSN

1226-508X

Publication Date

2016

Abstract/Excerpt

The economic theory of small firms often requires a reasoning process distinct from those typically used for large multinational enterprises (MNEs), since small firms typically do not possess the resources MNEs commonly employ to outperform similar domestic firms. In the current analysis, we argue that new small firms with international sales can better predict their revenue stream than can comparably aged firms with only domestic sales, and, as a result, international selling firms have higher levels of technical productive efficiency. We employ 7829 firm-year observations from the 2007 to 2011 years of the Kauffman Firm Survey microdata sample in our analysis. A stochastic frontier model empirically supports the result that technical productive efficiency is positively related to the foreign sales ratio. These results hold after controlling for multiple relevant owner and firm characteristics, as well as accounting for potential endogeneity concerns.

DOI

10.1080/1226508X.2015.1084240

Volume

45

Issue

1

First Page

42

Last Page

62

NSUWorks Citation

Baek, Hyungkee Young and Neymotin, Florence, "International Involvement and Production Efficiency among Startup Firms" (2016). HCBE Faculty Articles. 794.
https://nsuworks.nova.edu/hcbe_facarticles/794