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Impact of political instability on firm-level export decisions

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  • Kapri, Kul

Abstract

In this paper, I use South Asian firm-level data to examine the effect of political instability on firm-level decisions to enter the foreign market. This is the first micro-level study in the international trade literature to examine the relationship between political instability and the firm-level export decision. This study uses the IV probit model to analyze the repeated cross-sectional data collected by the World Bank. I estimate various specifications to show that political instability is closely related to firm-level decisions to enter the market. The results confirm that political instability increases the probability that a firm enters the foreign market.

Suggested Citation

  • Kapri, Kul, 2019. "Impact of political instability on firm-level export decisions," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 98-105.
  • Handle: RePEc:eee:reveco:v:59:y:2019:i:c:p:98-105
    DOI: 10.1016/j.iref.2018.08.008
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    References listed on IDEAS

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    Cited by:

    1. Naegels, Vanessa & D’Espallier, Bert & Mori, Neema, 2020. "Perceived problems with collateral: The value of informal networking," International Review of Economics & Finance, Elsevier, vol. 65(C), pages 32-45.

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    More about this item

    Keywords

    Exports; Global firm; Political instability; Firm heterogeneity; World bank;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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