The determinants of export performance in developing countries : the case of Indonesian manufacturing

In this paper we analyse export behaviour of Indonesian companies using a unique database covering all manufacturing firms active in 1995. We test a range of determinants, pointed out by the literature, separately for 28 industries at the three-digit level. Furthermore, the Pavitt taxonomy is applied look for broad sectoral patterns. To estimate the relation between export and its determinants we use a novel empirical model especially suited for estimating fractional variables. Our analysis points that both technology and cost related factors determine export behaviour in supplier dominated firms and, to a lesser degree, scale intensive firms. Our model works less well in explaing export of science base and specialised supplier firms. Also, we find export behaviour to differ between industries within the same Pavitt sector.