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Whatever next? Export market choices of New Zealand firms

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Abstract

We examine product and market entry choices of New Zealand exporters, using an enterprise level dataset which links firm performance measures with detailed data on merchandise trade. We focus our enquiry not on the broad question of what determines a firm's ability to export, but on the subsequent question: given that a firm has the ability to export, what determines the choices they make about what and where to export? We simultaneously consider firm and market level determinants of export market entry. At the firm level we find that measures of general and specific prior trade experience play an important role in determining the firm's future export activities. That is, we find evidence of path dependence within firms. We also find evidence of path dependence across firms, with entry into new export relationships reflecting demonstration effects from the export activities of other firms in the local area. These results are robust to the inclusion of other determinants of exporting, including the macroeconomic performance of destination countries, exchange rate movements, and the past performance of the exporting firm.

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Bibliographic Info

Paper provided by Reserve Bank of New Zealand in its series Reserve Bank of New Zealand Discussion Paper Series with number DP2009/19.

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Length: 41 p
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:nzb:nzbdps:2009/19

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  1. Aitken, B. & Hanson, G.H. & Harrison, A.E., 1994. "Spillovers, Foreign Investment and Export Behavior," Papers 95-06, Columbia - Graduate School of Business.
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Cited by:
  1. Cebeci, Tolga & Fernandes, Ana M. & Freund, Caroline & Pierola, Martha Denisse, 2012. "Exporter dynamics database," Policy Research Working Paper Series 6229, The World Bank.
  2. Darian Woods & Andrew Coleman, 2012. "Price, Quality, and International Agricultural Trade," Working Papers 12_08, Motu Economic and Public Policy Research.
  3. Procter, Roger, 2011. "Echanching Productivity: Towards an Updated Action Agenda," Occasional Papers 11/1, Ministry of Economic Development, New Zealand.
  4. Richard Fabling & Lynda Sanderson, 2009. "Entrepreneurship and aggregate merchandise trade growth in New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2009/09, Reserve Bank of New Zealand.
  5. Lawless, Martina, 2011. "Marginal Distance: Does Export Experience Reduce Firm Trade Costs?," Research Technical Papers 2/RT/11, Central Bank of Ireland.
  6. Philip R. Lane, 2009. "External Imbalances and Macroeconomic Policy in New Zealand," The Institute for International Integration Studies Discussion Paper Series iiisdp376, IIIS.

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