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Transport infraestructure, sunk costs and firms' export behaviour

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  • Pedro Albarrán

    ()

  • Raquel Carrasco

    ()

  • Adelheid Holl

    ()

Abstract

Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we092213.

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Date of creation: Jun 2009
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Handle: RePEc:cte:werepe:we092213

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Keywords: Export decision; Transport infrastructure; Accessibility; Dynamic panel data;

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References

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Cited by:
  1. Eddy Bekkers, 2011. "Heterogeneous Popularity and Exporting Uncertainty," Open Economies Review, Springer, vol. 22(5), pages 797-824, November.
  2. Richard Fabling & Arthur Grimes & Lynda Sanderson, 2011. "Any port in a storm? The impact of new port infrastructure on New Zealand exporter behaviour," Reserve Bank of New Zealand Discussion Paper Series DP2011/01, Reserve Bank of New Zealand.

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