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Using Stepping Stones to Enter Distant Export Markets

Author

Listed:
  • Lejour Arjan

    () (CPB Netherlands Bureau for Economic Policy Analysis, PO Box 80153, 2508 GM The Hague, The Netherlands)

  • Creusen Harold

    () (National Health Care Institute (Zorginstituut Nederland), Diemen, The Netherlands)

Abstract

This paper analyses firms’ export entry decisions and their subsequent expansion to other export markets using Dutch firm-level international transaction data. In particular new exporters increase quickly the distance between their export markets and their home country. They are also going to export to countries in which the institutional and regulatory quality is lower. We show that firms follow a stepping stone approach for learning to export and to enter distant markets. The probability to enter a market at 1,000 km from the Netherlands increases by about 25% if the firm already exports to a market at 500 km from the new one.

Suggested Citation

  • Lejour Arjan & Creusen Harold, 2015. "Using Stepping Stones to Enter Distant Export Markets," Global Economy Journal, De Gruyter, vol. 15(1), pages 107-132, March.
  • Handle: RePEc:bpj:glecon:v:15:y:2015:i:1:p:107-132:n:5
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    References listed on IDEAS

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    1. Maggioni Daniela, 2012. "Learning by Exporting in Turkey: An Investigation for Existence and Channels," Global Economy Journal, De Gruyter, vol. 12(2), pages 1-20, June.
    2. Roberto Alvarez & Ricardo A. López, 2008. "Entry and Exit in International Markets: Evidence from Chilean Data," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 692-708, September.
    3. Morales, Eduardo & Sheu, Gloria & Zahler, Andrés, 2011. "Gravity and extended gravity: estimating a structural model of export entry," MPRA Paper 30311, University Library of Munich, Germany.
    4. Matthieu Crozet & Pamina Koenig & Vincent Rebeyrol, 2008. "Exporting to Insecure Markets: a Firm-Level Analysis," Working Papers 2008-13, CEPII research center.
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