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Lifting the Domestic Veil: The Challenges of Exporting Differentiated Goods Across the Development Divide

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  • Alejandro Artopoulos
  • Daniel Friel
  • Juan Carlos Hallak

Abstract

Several developing countries feature weak performances as exporters of differentiated goods to developed countries. This paper builds a conceptual framework to explain the obstacles that prevent producers of differentiated products from establishing a consistent presence in the developed world and the process through which those obstacles may be overcome. We build our framework based on case studies of export emergence in four Argentine industries: motorboats, television programs, wines, and wooden furniture. We find that exporting consistently to developed countries requires drastic changes in how business is conceived and conducted relative to the practices that prevail among domestically-oriented firms. Attempts by these firms to export often do not succeed because they approach foreign markets the same way that they approach the domestic one. Their failure to change the business approach stems from their inability to access critical (tacit) knowledge about differences in consumption patterns and business practices in developed countries. In three of the sectors we study, an export pioneer is the first to implement the necessary changes to established practices. His actions set a benchmark, unleashing a diffusion process that fosters export emergence in the sector. The most salient feature of export pioneers is their knowledge advantage about foreign markets stemming from their embeddedness in the business community of their industry in a developed country.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16947.

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Date of creation: Apr 2011
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Handle: RePEc:nbr:nberwo:16947

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  1. Freund, Caroline & Pierola, Martha Denisse, 2010. "Export entrepreneurs : evidence from Peru," Policy Research Working Paper Series 5407, The World Bank.
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Cited by:
  1. Artopoulos, Alejandro & Friel, Daniel & Hallak, Juan Carlos, 2013. "Export emergence of differentiated goods from developing countries: Export pioneers and business practices in Argentina," Journal of Development Economics, Elsevier, Elsevier, vol. 105(C), pages 19-35.
  2. Esteban Jaimovich & Vincenzo Merella, 2011. "Love for Quality, Comparative Advantage, and Trade," Carlo Alberto Notebooks, Collegio Carlo Alberto 216, Collegio Carlo Alberto, revised 2012.
  3. Juan Carlos Hallak & Jagadeesh Sivadasan, 2009. "Firms' Exporting Behavior under Quality Constraints," Working Papers, Center for Economic Studies, U.S. Census Bureau 09-13, Center for Economic Studies, U.S. Census Bureau.
  4. Chen, Natalie & Juvenal, Luciana, 2013. "Quality, Trade, and Exchange Rate Pass-Through," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 165, Competitive Advantage in the Global Economy (CAGE).
  5. Facundo Albornoz & Hector Calvo-Pardo & Gregory Corcos & Emanuel Ornelas, 2010. "Sequential Exporting," CEP Discussion Papers, Centre for Economic Performance, LSE dp0974, Centre for Economic Performance, LSE.
  6. Munasib, Abdul & Roy, Devesh, 2014. "Financial reforms, product differentiation, and trade," Economics Letters, Elsevier, Elsevier, vol. 123(1), pages 37-41.
  7. Alejandro Artopoulos & Daniel Friel & Juan Carlos Hallak, 2011. "Export Emergence of Differentiated Goods from Developing Countries: Four Argentine Cases," Working Papers, Universidad de San Andres, Departamento de Economia 107, Universidad de San Andres, Departamento de Economia, revised Mar 2011.
  8. Charles Sabel & Eduardo Fernandez-Arias & Ricardo Hausmann & Andres Rodriguez-Clare & Ernesto H. Stein, 2012. "Export Pioneers in Latin America," Research Department Publications, Inter-American Development Bank, Research Department 4769, Inter-American Development Bank, Research Department.
  9. Massimiliano Bratti & Giulia Felice, 2012. "Buyer-Supplier Relationships, Internationalization and Product Innovation," Development Working Papers, Centro Studi Luca d\'Agliano, University of Milano 327, Centro Studi Luca d\'Agliano, University of Milano, revised 13 Nov 2012.
  10. Chakrabarty, Subhajit & Nag, Biswajit, 2014. "Perceptions of international trade barriers: Empirical study of small apparel firms," MPRA Paper 52635, University Library of Munich, Germany.

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