This study quantifies the extent to which the subnational dimension matters for emerging economy new ventures' exports. Moreover, it examines the interaction between the subnational dimension and industry affiliation, also quantifying the role of industry affiliation at the subnational level on these firms' exports.
This study uses variance decomposition analysis to quantify the magnitude of the effect of the subnational dimension and its interaction with industry on emerging economy new ventures' exports. The sample comprises 9,952 new ventures across nine major emerging economies over a 12-year period.
This study finds that subnational regions account for 11.6% of the variance in emerging economy new ventures' exports. For comparison, the home country explains 5.2% of such a variance. Moreover, the interaction between the subnational dimension and industry contributes 11.3% to this explanatory power, suggesting that industry affiliation is particularly important when assessed at the subnational level, rather than the country level.
International business research has quantified the importance of the subnational dimension by focusing either on the host country or on firms from developed countries. This is the first study to assess the magnitude of the importance of the home country's subnational dimension for emerging economy new ventures' exports using a large, multi-country sample.
