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History Matters for the Export Decision: Plant Level Evidence from Turkish Manufacturing Industry

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Author Info

  • Kamil Yılmaz

    () (Department of Economics, Koç University)

  • Şule Özler

    (Economics Department, UCLA)

  • Erol Taymaz

    (Department of Economics, METU)

Abstract

In a dynamic panel data framework, we investigate the factors influencing the export decision of the Turkish manufacturing plants over the 1990-2001 period. Our results support the presence of high sunk costs of entry to export markets, as well as the hypothesis that the full history of export participation matters for the current export decision. We further show that the efect of the past export experience on current export decision rapidly depreciates over time: Recent export market participation matters more than the participation further in the past. Finally, we show that while persistence in exporting helps lower the costs of re-entry today, there are diminishing returns to export experience. Our results are robust to plant characteristics (plant size, technology, composition of the employment), the spillovers from the presence of exporters in the same industry, as well as industry and year efects.

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Bibliographic Info

Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 0706.

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Length: 40
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:koc:wpaper:0706

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Keywords: Export decision; productivity; sunk costs; plant characteristics;

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References

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  1. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and Productivity in International Trade," Boston University - Institute for Economic Development 105, Boston University, Institute for Economic Development.
  2. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
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Citations

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Cited by:
  1. Altan Aldan & Mahmut Gunay, 2008. "Entry to Export Markets and Productivity: Analysis of Matched Firms in Turkey," Working Papers 0805, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  2. Wei, Xuan & Thornsbury, Suzanne, 2011. "Information Cost As A Prior Hurdle to Exporting," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103622, Agricultural and Applied Economics Association.
  3. Bircan, Çağatay, 2011. "Optimal Degree of Foreign Ownership under Uncertainty," Working Papers 617, Research Seminar in International Economics, University of Michigan.

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