The width and depth of local exports: spatial and cross-sectoral effects on firm entry, survival and growth

Entrepreneurship is a localised process that relies on local institutions, resources, and networks. Interactions between agents in the space may have their origins in the domestic milieu, but they may also draw their roots from international economic linkages. Yet, there is a surprising lack of research that combines economic geography, international trade, and entrepreneurship literature to address these issues at the local level. Our study fills this gap by examining the effects of manufacturing export diversification (extensive margin) and specialisation (intensive margin) on firm entry, survival, and growth within and across cities and towns. Spatial econometric techniques are applied to firm population data from a small and open economy over the period 2007–2017. Extensive margin is identified as the main channel of influence on local entrepreneurial outcomes in manufacturing, but the impact on firm survival and growth in other localities is negative. Manufacturing export margins also impact entrepreneurial outcomes in other sectors of the local economy.