Working Paper No. 1210

Entrepreneurial Export Strategy: The Sooner the Better?

Published: May 3, 2018, revised September, 2018Pages: 22Keywords: Born globals; Exporting; Firm growth; Globalization; Job creationJEL-codes: F14; F23; L25; M13

Entrepreneurial Export Strategy: The Sooner the Better? Shon Ferguson, Magnus Henrekson and Louise Johannesson


Policymakers in several countries have recently taken steps to promote the rapid export expansion of small- and medium-sized enterprises (SMEs). The goal of these policies has been to create successful export-intensive startups, which are often referred to as born globals. These measures are motivated by studies claiming that born global firms are disproportionately important for job creation and economic growth.

Using detailed register data on the universe of Swedish manufacturing startups founded 2001–2008, we find that born globals are a very small group of firms whose long-run size and growth do not outperform other exporting firms. Thus, the notion that born globals are superior to firms that follow a more gradual internationalization process, a conclusion largely based on case studies and surveys, does not withstand scrutiny. Policymakers must therefore be aware that encouraging more born globals need not necessarily lead to large benefits for the overall economy, especially in terms of employment.

 

 

 

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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