Direct Versus Indirect Exports in Post-Communist Europe and Central Asia: The Role of Innovation Activities and Internationalization

Abstract

ABSTRACT The distinction between direct and indirect exporting has been increasingly stressed in recent advances in the theory and empirics of international trade. In particular, the prior literature suggests a hierarchy of exporting decisions determined by firm productivity. We use firm-level data from a wide group of post-communist countries to investigate which characteristics of firms can explain their choice of export modes. We find that firm internationalization, firm size, and per worker revenue are linked to exporting decisions in a way consistent with Lu’s et al. model, while the relationship with innovation performance is more complex.