The export propensity of Polish SMEs

In many countries, firms are encouraged to export as a means of contributing to economic growth. The successes of small and medium-sized enterprises (SMEs) in industrialized countries has led to the increasing recognition of their role in transition economies - including exports development. The objective of this investigation is to determine the major factors that influence the propensity to export of Polish SMEs within the context of an expanded European Union (EU). Using data from a survey of enterprises in the Gdansk province, we develop a Logit model to explain why some SMEs are exporters and others are not. The results indicate that access to bank loans, knowledge of competing firms, a large share of the domestic market and preparedness for the accession of Poland to the EU are important drivers of export propensity. We find evidence that awareness of special foreign credit available for Polish SMEs has a positive influence on their export propensity, as also does the use of IT tools in distribution and marketing. On the contrary we find that firms which have high profitability in their domestic market, or are concerned about taxation, or possess a large percentage of Polish capital have a reduced propensity to export.