Examining the effect of informal and foreign competitors on innovation and export: evidence from service SMEs

Year 2024, Volume: 24 Issue: 3, 335 - 368, 11.07.2024

Ebru Ozturk

https://doi.org/10.21121/eab.20240301

Abstract

Threats from informal and foreign competitor groups have been particular importance for local emerging economy firms’ strategies. In this line, previous studies have examined the link between competitor groups and emerging economy firm success. Extant studies have mostly explored firms in the manufacturing sectors and they have not investigated what the results mean for smaller firms. To extend prior research, this paper examines to what extent informal and foreign competition affect the innovation and export performance of service SMEs. In analyzing cross-sectional data across Eastern Europe and Central Asia countries, this research finds that informal and foreign competition increase service SMEs’ innovation performance and the informal competition has bigger effect than foreing competition. The findings further reveal that informal competition decreases service SMEs’ export performance whereas foreign competition raises service SMEs’ export performance. Overall, this research aims to extend the existing literature that explores the influence of competition on firms’ strategies and decisions.

Keywords

Informal competition, Foreign competition, Service sector, SMEs, Innovation, Export performance

İnovasyon ve ihracatta kayıt dışı ve yabancı rakiplerin etkisinin incelenmesi: hizmet KOBİ'leri örneği

Abstract

Kayıt dışı ve yabancı rakip gruplardan gelen tehditler gelişmekte olan ülke firmalarının stratejileri için özel bir önem taşımaktadır. Bu doğrultuda, önceki çalışmalar rakip gruplar ile gelişmekte olan ülkelerde yeralan firmalarının başarısı arasındaki bağlantıyı incelemiştir. Mevcut çalışmalar çoğunlukla imalat sektörlerindeki firmaları araştırmış ve sonuçların daha küçük olcekli firmalar için ne anlama geldiğini araştırmamıştır. Bu makale, kayıt dışı ve yabancı rekabetin hizmet KOBİ'lerinin yenilik ve ihracat performansını ne ölçüde etkilediğini incelemektedir. Doğu Avrupa ve Orta Asya ülkelerindeki kesitsel verileri analiz eden bu araştırma, kayıt dışı ve yabancı rekabetin hizmet KOBİ'lerinin yenilik performansını artırdığını ve kayıt dışı rekabetin yabancı rekabetten daha büyük bir etkiye sahip olduğunu ortaya koymaktadır. Bulgular ayrıca kayıt dışı rekabetin hizmet KOBİ'lerinin ihracat performansını azalttığını, yabancı rekabetin ise hizmet KOBİ'lerinin ihracat performansını artırdığını ortaya koymaktadır. Genel olarak, bu araştırma, rekabetin firmaların stratejileri ve kararları üzerindeki etkisini araştıran mevcut literatüre katkı sağlamayı amaçlamaktadır.

Keywords

Informal competition, Foreign competition, Service sector, SMEs, Innovation, Export performance

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