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The Impact Of Trade Costs On Firm Entry, Exporting, And Survival In Korea

Author

Listed:
  • SOOIL KIM
  • JEFFREY J. REIMER
  • MUNISAMY GOPINATH

Abstract

This study uses a unique firm-level dataset to examine how falling trade costs from 1993-2001 affected entry, exit, productivity, and exporting in the Korean manufacturing sector. We verify many of the predictions of recent heterogeneous-firm models of international trade. For example, falling trade costs reduced entry by new Korean firms, increased their probability of exit, and reduced the market share of surviving firms. We also find that small firms had a particularly high level of dynamism over the sample period. Small firms were more likely to enter and exit, and marginally more likely to gain market share, enter export markets for the first time, and improve their productivity.
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Suggested Citation

  • Sooil Kim & Jeffrey J. Reimer & Munisamy Gopinath, 2011. "The Impact Of Trade Costs On Firm Entry, Exporting, And Survival In Korea," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 434-446, April.
    • Handle: RePEc:bla:ecinqu:v:49:y:2011:i:2:p:434-446
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    Citations

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    Cited by:

    1. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 6, pages 105-108, World Scientific Publishing Co. Pte. Ltd..
    2. Cui, Chuantao & Li, Leona Shao-Zhi, 2021. "The effect of the US–China trade war on Chinese new firm entry," Economics Letters, Elsevier, vol. 203(C).
    3. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 6, pages 105-108 World Scientific Publishing Co. Pte. Ltd..
    4. Salamat Ali, 2020. "Exchange Rate Effects on Agricultural Exports: Transaction‐Level Evidence from Pakistan," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 1020-1044, May.
    5. Arita, Shawn & Hemanchandra, Dilini & Leung, PingSun, 2014. "Can Local Farms Survive Globalization?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(2), pages 227-248, August.
    6. Eleonora Fichera & Yevgeniya Shevtsova, 2020. "Sunk exporting costs and export market coverage," Manchester School, University of Manchester, vol. 88(4), pages 599-616, July.
    7. repec:bla:ecinqu:v:51:y:2013:i:3:p:1886-1902 is not listed on IDEAS
    8. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).
    9. Boehe, Dirk & F S Campos, Camila & Menezes-Filho, Naercio, 2017. "Importers and the Survival of New Exporters," MPRA Paper 116045, University Library of Munich, Germany, revised 2022.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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