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Sequential Exporting

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  • Hector Calvo

    (University of Southampton, UK)

  • Gregory Corcos

    (NHH, Norway)

  • Emanuel Ornelas

    (London School of Economics, UK)

  • Facundo Albornoz

    (University of Birmingham, UK)

Abstract

Thus, it is the possibility of profitable expansion at both the intensive and extensive margins what makes incurring the sunk costs to enter a single foreign market worthwhile despite the high failure rates. Using a census of Argentinean firm-level manufacturing exports from 2002 to 2007, we find empirical support for several implications of our proposed mechanism, indicating that the practice of “sequential exporting” is pervasive. Sequential exporting has broad but subtle implications for trade policy. For example, a reduction in trade barriers in a country has delayed entry effects in its own market, while also promoting entry in other markets. This trade externality poses challenges for the quantification of the effects of trade liberalization programs, while suggesting neglected but critical implications of international trade agreements.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 1065.

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Date of creation: 2010
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Handle: RePEc:red:sed010:1065

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References

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