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<p>Despite growing interest in the internationalization of small firms, little is known about how foreign networks shape their export capabilities in the Western Balkans. Informed by the Resource-Based View, Network Theory, and Melitz’s Theory of Heterogeneous Firms, the study finds that foreign networks substantially increase both the export propensity and intensity of small manufacturing firms. Using firm-level data from 2016 to 2023, the analysis indicates that foreign ownership, foreign borrowing, management with international experience, sales to multinational corporations, and hiring foreign workers significantly contribute to small firms’ export capabilities. The findings suggest that foreign networks serve as vital channels for knowledge, information, and market access, helping resource-constrained firms overcome barriers to internationalization. These insights hold important implications for policymakers seeking to enhance the competitiveness of small firms by fostering foreign linkages, promoting open market policies, and investing in the development of technological and human capital.</p>

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Foreign networks and export capabilities: insights from small manufacturing firms

  • 期刊论文

  • 发表日期：

    2025年8月12日

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  • Petrit Gashi,
  • Albian Krasniqi

摘要

Despite growing interest in the internationalization of small firms, little is known about how foreign networks shape their export capabilities in the Western Balkans. Informed by the Resource-Based View, Network Theory, and Melitz’s Theory of Heterogeneous Firms, the study finds that foreign networks substantially increase both the export propensity and intensity of small manufacturing firms. Using firm-level data from 2016 to 2023, the analysis indicates that foreign ownership, foreign borrowing, management with international experience, sales to multinational corporations, and hiring foreign workers significantly contribute to small firms’ export capabilities. The findings suggest that foreign networks serve as vital channels for knowledge, information, and market access, helping resource-constrained firms overcome barriers to internationalization. These insights hold important implications for policymakers seeking to enhance the competitiveness of small firms by fostering foreign linkages, promoting open market policies, and investing in the development of technological and human capital.