Export market participation with sunk costs and firm heterogeneity
AbstractIn this article we investigate the importance of sunk costs, firm characteristics and spillovers from nearby exporters on a firm's decision to participate in exporting. The empirical analysis involves the estimation of a nonstructural, discrete choice, dynamic model with firm heterogeneity. By using panel data for Estonian companies from 1994 to 1999 we find that: (i) both sunk costs and observable firm characteristics are important determinants of export market participation; (ii) previous history matters, in that, if a firm has been exporting the previous period or the period before, it significantly increases the likelihood of the firm exporting in the current period; (iii) larger firms with high capital intensity and foreign ownership are more likely to be exporters; (iv) operating in an export-oriented industry increases a firm's likelihood of exporting.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 42 (2010)
Issue (Month): 25 ()
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- Dieter Pennerstorfer, 2012.
"Export, Migration, and Costs of Market Entry: Evidence from Central European Firms,"
ERSA conference papers
ersa12p954, European Regional Science Association.
- Dieter Pennerstorfer, 2011. "Export, Migration, and Costs of Market Entry: Evidence from Central European Firms," WIFO Working Papers 405, WIFO.
- Vu, Van Huong, 2012. "Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs," MPRA Paper 40708, University Library of Munich, Germany.
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