Determinants of export performance: differences between service and manufacturing SMEs

We explore the relationships among knowledge sourcing, innovativeness, and export performance of a firm, and investigate how these links differ between service and manufacturing companies. Based on survey data from 4347 East German firms, we develop a structural equation model which enables us to disentangle the direct and indirect (via innovativeness) impact of knowledge sourcing on a firm's export performance. We find that both internal and external knowledge influence a firm's exports both directly path and indirectly via firm innovativeness (mediator variable). For service firms, external knowledge sourcing is more important for enhancing internal knowledge and innovativeness than for manufacturing companies.