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Entry and Exit in International Markets: Evidence from Chilean Data

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  • Roberto Alvarez
  • Ricardo A. López

Abstract

Several studies examine the patterns and determinants of entry and exit in manufacturing industries. Not much work exists on entry and exit in international markets. This paper uses Chilean data to analyze the industry-level determinants of entry and exit in export markets. First, we show as stylized facts that entry and exit rates differ across industries, vary over time, and are positively correlated. Then, we study the main determinants of these patterns. Our econometric analysis shows that within-industry heterogeneity, measured by differences in productivity or other firm characteristics, has a significant effect on plant turnover in international markets. Our findings reveal that trade costs, factor intensities, and fluctuations in the real exchange rate play a minor role explaining entry and exit. This last result is consistent with hysteresis in international markets. Copyright � 2008 The Authors; Journal compilation � Blackwell Publishing Ltd 2008.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 16 (2008)
Issue (Month): 4 (09)
Pages: 692-708

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Handle: RePEc:bla:reviec:v:16:y:2008:i:4:p:692-708

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  1. Redding, Stephen J & Venables, Anthony J., 2003. "Geography and Export Performance: External Market Access and Internal Supply Capacity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3807, C.E.P.R. Discussion Papers.
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Cited by:
  1. Cadot, Olivier & Iacovone, Leonardo & Pierola, Denisse & Rauch, Ferdinand, 2011. "Success and failure of African exporters," Policy Research Working Paper Series 5657, The World Bank.
  2. Görg, Holger & Spaliara, Marina-Eliza, 2013. "Export market exit, financial pressure and the crisis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9599, C.E.P.R. Discussion Papers.
  3. Richard I.D. Harris & Qian Cher Li, . "Export-market dynamics and the probability of firm closure: Evidence for the UK," Working Papers, Business School - Economics, University of Glasgow 2008_17, Business School - Economics, University of Glasgow.
  4. John P. Weche Geluebcke & Chiara Franco, 2013. "The death of German firms: What role for foreign direct investment?," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 264, University of Lüneburg, Institute of Economics.
  5. Mawuli Segnon & Thomas Lux, 2013. "Multifractal Models in Finance: Their Origin, Propterties, and Applications," Kiel Working Papers 1860, Kiel Institute for the World Economy.
  6. Harris, Richard I.D. & Li, Qian Cher, 2008. "Export-market dynamics and the probability of firm closure: Evidence for the UK," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2008-28, Scottish Institute for Research in Economics (SIRE).
  7. Harold Creusen & Arjan Lejour, 2011. "Uncertainty and the export decisions of Dutch firms," FIW Working Paper series, FIW 069, FIW.
  8. Mélise Jaud & Madina Kukenova & Martin Strieborny, 2009. "Financial dependence and intensive margin of trade," PSE Working Papers halshs-00575005, HAL.
  9. Hadjikhani, Amjad & Hadjikhani, Annoch Isa & Thilenius, Peter, 2014. "The internationalization process model: A proposed view of firms’ regular incremental and irregular non-incremental behaviour," International Business Review, Elsevier, Elsevier, vol. 23(1), pages 155-168.

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