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

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Author Info
Sule Ozler () (Department of Economics, UCLA)
Erol Taymaz () (Department of Economics, METU)
Kamil Yilmaz () (Department of Economics, Koc University)

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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 effect 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 effects.

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File URL: http://www.erc.metu.edu.tr/menu/series07/0704.pdf
File Format: application/pdf
File Function: First version, 2007
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Publisher Info
Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0704.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 40 pages
Date of creation: Mar 2007
Date of revision: Mar 2007
Handle: RePEc:met:wpaper:0704

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Web page: http://www.erc.metu.edu.tr
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Related research
Keywords: Export decision; productivity; sunk costs; plant characteristics;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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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. [Downloadable!]
    Other versions:
  2. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, vol. 67(2), pages 373-391, December. [Downloadable!] (restricted)
  3. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September. [Downloadable!] (restricted)
  4. Helpman, Elhanan & Melitz, Marc J & Yeaple, Stephen R, 2003. "Export versus FDI," CEPR Discussion Papers 3741, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Andrew B. Bernard & Joachim Wagner, 1998. "Export Entry and Exit by German Firms," NBER Working Papers 6538, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Ozcelik, Emre & Taymaz, Erol, 2004. "Does innovativeness matter for international competitiveness in developing countries?: The case of Turkish manufacturing industries," Research Policy, Elsevier, vol. 33(3), pages 409-424, April. [Downloadable!] (restricted)
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  8. Choi, E Kwan & Harrigan, James, 2004. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
  9. repec:rus:hseeco:121669 is not listed on IDEAS
  10. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Ashoka Mody & Kamil Yilmaz, 2002. "Imported Machinery for Export Competitiveness," World Bank Economic Review, Oxford University Press, vol. 16(1), pages 23-48, June.
  12. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March. [Downloadable!]
  13. 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. [Downloadable!] (restricted)
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  14. David Greenaway & Richard Kneller, 2004. "Exporting and Productivity in the United Kingdom," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 358-371, Autumn.
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