Technology and Export Two-Way Link: Firm-Level Multidimensional Technology Adoption and Utilization

This study explores the relationship between multidimensional technology adoption and utilization with exports, focusing on textile and clothing firms in Indonesia. Grounded by self-selection and learning-by-exporting hypotheses, this study uses binomial probit and ordinary least squares (OLS) models with data from 376 firms to estimate a two-way link between a granular technology index, export propensity, and export intensity. The findings show that firms adopting and utilizing advanced technology effectively in administrative and production functions are more likely to self-select into exporting. Upon entering export markets, firms significantly increased their adoption and utilization of technologies, primarily in production functions. However, as export intensity increased, production technology upgrading increased slowly, while administrative technology adoption and use decreased. These results provide nuanced insights into how technology evolves across different stages of export activity and underscore targeted technology upgrading programs that address acquisition or routine utilization in every export activity to foster competitiveness.