Innovation, Internationalisation and the Performance of Microbusinesses

Andrew Henley*, Meng Song

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This article integrates internationalisation, and specifically exporting, into a conceptualisation of how innovation production leads to productivity performance in microbusinesses employing less than ten people. Innovation production is reframed for the microbusiness context by focusing on knowledge acquisition and formalisation rather than on R&D activity. Propensity score matching analysis is used to investigate British microbusiness survey data. It finds a causal process in which innovation promotes exporting activity. This in turn leads to improved productivity. In contrast to research on larger businesses, the study finds no direct link between innovation production and productivity. These findings are robust to various checks for potential endogeneity arising from feedback into innovation from internationalisation and from self-selection of high productivity firms into exporting.
Original languageEnglish
Pages (from-to)337-364
Number of pages28
JournalInternational Small Business Journal
Issue number4
Early online date23 Dec 2019
Publication statusPublished - 1 Jun 2020

Bibliographical note

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  • Microbusiness, innovation, productivity, exporting, knowledge acquisition


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