The Decision to Enter and Exit Foreign Markets: Evidence from U.K. SMEs
AbstractThis paper studies the dynamics of the export behaviour of small and medium sized enterprises (SMEs) in the U.K. between 1994 and 1998. I use a dynamic empirical model to disentangle three distinct dimensions of a firms’ participation in foreign markets: sunk cost induced hysteresis, firm heterogeneity and macroeconomic instability. The results show that SMEs view exporting as an irreversible investment, with state dependence being the largest explanatory factor. Moreover, observable firm characteristics, such as size and ownership, play a significant role in distinguishing exporters from non-exporters. Finally, there is no evidence that the 1992–1993 recession influenced firms’ export decisions in subsequent years implying that the results provide a valid indication of SMEs "typical" export behaviour. Copyright Springer 2005
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 25 (2005)
Issue (Month): 3 (October)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100338
entry-exit decision; markets; probit; panel techniques;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Campa, Jose Manuel, 2004.
"Exchange rates and trade: How important is hysteresis in trade?,"
European Economic Review,
Elsevier, vol. 48(3), pages 527-548, June.
- Campa, José Manuel, 2000. "Exchange Rates and Trade: How Important is Hysteresis in Trade?," CEPR Discussion Papers 2606, C.E.P.R. Discussion Papers.
- Campa, Jose M., 2000. "Exchange rates and trade: How important is hysteresis in trade?," IESE Research Papers D/427, IESE Business School.
- Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
- Andrianos Tsekrekos, 2013. "Irreversible exit decisions under mean-reverting uncertainty," Journal of Economics, Springer, vol. 110(1), pages 5-23, September.
- André van Stel & Jolanda Hessels & Dirk De Clercq, 2006.
"Knowledge spillovers and entrepreneurs' export orientation,"
Scales Research Reports
H200619, EIM Business and Policy Research.
- de Clercq, D. & Hessels, S.J.A. & van Stel, A.J., 2007. "Knowledge Spillovers and Entrepreneurs’ Export Orientation," ERIM Report Series Research in Management ERS-2007-038-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Sun, Churen & Tian, Guoqiang & Zhang, Tao, 2011. "When Pareto meets Melitz: the inapplicability of the Melitz-Pareto model for Chinese firms," MPRA Paper 35597, University Library of Munich, Germany.
- Dirk Clercq & Jolanda Hessels & André Stel, 2008. "Knowledge spillovers and new ventures’ export orientation," Small Business Economics, Springer, vol. 31(3), pages 283-303, October.
- Arulampalam, Wiji & Stewart, Mark, 2007.
"Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators,"
IZA Discussion Papers
3039, Institute for the Study of Labor (IZA).
- Wiji Arulampalam & Mark B. Stewart, 2009. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(5), pages 659-681, October.
- Arulampalam, Wiji & Stewart, Mark B., 2008. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," The Warwick Economics Research Paper Series (TWERPS) 884, University of Warwick, Department of Economics.
- Pradhan, Jaya Prakash & Das, Keshab, 2012. "Exports by Indian Manufacturing SMEs: Regional Patterns and Determinants," MPRA Paper 41804, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.