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Exports and information spillovers

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  • Nicita, Alessandro
  • Olarreaga, Marcelo

Abstract

Exporters'performance in a particular market may affect their future exports to the rest of the world. Importers may base their future transaction decision on the information revealed by exporters'past performance in other countries. Similarly, exporters acquire valuable information on foreign consumer tastes, product standards, or customs administration that may profitably be used in future transactions with other countries. the authors estimate the effects of these information spillovers across markets on the export patterns of four developing countries (Egypt, the Republic of Korea, Malaysia, and Tunisia). A dollar increase in exports to the United States generates on average an extra 2 to 14 cents of exports to the rest of the world in the next period. Social and ethnic networks seem to reinforce these information spillovers, especially in developing countries, where they appear to be geographically more concentrated. The exception is China and to some extent Hong Kong, probably reflecting a geographically more diversified migration pattern. The exchange of information among current and potentialexport markets can significantly affect a developing country's export performance. Bilateral information spillovers across markets are negligible or nonexistantfor exports from the United States, where there is less need to create a reputation in international markets. Similarly, Egypt's good export performancewould be more easily noticed in Argentina or India (where the market is small) than would increased exports to France or the United States.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2474.

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Date of creation: 30 Nov 2000
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Handle: RePEc:wbk:wbrwps:2474

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Keywords: Environmental Economics&Policies; Health Economics&Finance; General Technology; ICT Policy and Strategies; Economic Theory&Research;

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Citations

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Cited by:
  1. James E. Rauch & Vitor Trindade, 2003. "Information, International Substitutability, and Globalization," American Economic Review, American Economic Association, American Economic Association, vol. 93(3), pages 775-791, June.
  2. Alejandro Izquierdo & Jacques Morriset & Marcelo Olarreaga, 2003. "Information Diffusion in International Markets," IDB Publications 6509, Inter-American Development Bank.
  3. Daude, Christian & Fratzscher, Marcel, 2008. "The pecking order of cross-border investment," Journal of International Economics, Elsevier, Elsevier, vol. 74(1), pages 94-119, January.
  4. Alessandro Nicita & Marcelo Olarreaga & Isidro Soloaga, 2003. "The Region as an Export Platform to the World? The Case of Mercosur," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 442-451.
  5. World Bank, 2007. "International trade and Climate Change : Economic, Legal, and Institutional Perspectives," World Bank Publications, The World Bank, number 6831, August.
  6. Alejandro Izquierdo & Jacques Morriset & Marcelo Olarreaga, 2003. "Difusión de la información en mercados internacionales," Research Department Publications, Inter-American Development Bank, Research Department 4336, Inter-American Development Bank, Research Department.

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