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Are sunk costs in exporting country specific?

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  • Andreas Moxnes

Abstract

Previous studies have shown that there are significant sunk entry costs in exporting. However, the empirical literature has not addressed whether these costs are global or country specific. In this paper, I show that both are present and estimate that country-specific costs are about three times the magnitude of global costs. Furthermore, I show that international standards harmonization has strong positive effects on imported variety in small and remote markets. Calibration of a modified Chaney (2008) model indicates that these markets will gain access to 3-4% more imported varieties when global costs increase by 10%, holding total entry costs constant.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 43 (2010)
Issue (Month): 2 (May)
Pages: 467-493

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Handle: RePEc:cje:issued:v:43:y:2010:i:2:p:467-493

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Cited by:
  1. Békés, Gábor & Muraközy, Balázs, 2012. "Temporary trade and heterogeneous firms," Journal of International Economics, Elsevier, vol. 87(2), pages 232-246.
  2. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
  3. Andreas Kropf & Philip Ulrich Sauré, 2012. "Fixed Costs per Shipment," Working Papers 2012-13, Swiss National Bank.
  4. Mion, Giordano & Opromolla, Luca David, 2013. "Managers’ mobility, trade performance, and wages," Working Paper Series 1596, European Central Bank.
  5. Fulvio Castellacci, 2014. "Service Firms Heterogeneity, International Collaborations and Export Participation," Journal of Industry, Competition and Trade, Springer, vol. 14(2), pages 259-285, June.
  6. Fulvio, Castellacci, 2011. "Service innovation and the proximity-concentration trade-off model of trade and FDI," MPRA Paper 31002, University Library of Munich, Germany.
  7. Mukim, Megha, 2012. "Geography and exporting behavior : evidence from India," Policy Research Working Paper Series 5979, The World Bank.

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