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The Determinants of Competitiveness of the Portuguese Defense Industry

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  • Roxanne Merenda

Abstract

This paper exploits a panel data ranging from 2010 to 2019 to investigate firm-level determinants of export intensity in the Portuguese defense industry, using a fixed effects model. As in any study exploiting corporate finance panel data, it is likely that some variables are endogenous due to reverse causality. Although we address this issue, the interpretation of our results cannot be fully causal. We find evidence that learning economies, proxied by export persistence, are the largest determinants associated with export intensity at firm level. Worker productivity and firm size also play a positive and significant role. Financial indicators such as financial pressure and leverage ratio negatively correlate with export intensity, albeit not always significantly. Finally, and contrary to the literature, we cannot find evidence that the Portuguese defense industry’s competitiveness rely on investment and R&D, nor is it impacted by geographical agglomeration.

Suggested Citation

  • Roxanne Merenda, 2021. "The Determinants of Competitiveness of the Portuguese Defense Industry," GEE Papers 0159, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2021.
    • Handle: RePEc:mde:wpaper:0159
    as

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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_159.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Exports; Competitiveness; Firm-level data; Defense industry;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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