IDEAS home Printed from https://ideas.repec.org/a/pal/jintbs/v47y2016i9d10.1057_s41267-016-0015-2.html
   My bibliography  Save this article

Explaining intermittent exporting: Exit and conditional re-entry in export markets

Author

Listed:
  • Michele Bernini

    (National Institute of Economic and Social Research)

  • Jun Du

    (Aston University)

  • James H. Love

    () (University of Warwick)

Abstract

Abstract Intermittent exporting is something of a puzzle. In theory, exporting represents a major commitment, and is often the starting point for further internationalization. However, intermittent exporters exit and subsequently re-enter exporting, sometimes frequently. We develop a conceptual model to explain how firm characteristics and market conditions interact to affect the decision to exit and re-enter exporting, and model this process using an extensive dataset of French manufacturing firms from 1997 to 2007. As anticipated, smaller and less productive firms are more likely to exit exporting, and react more strongly to changes in both domestic and foreign markets than larger firms. Exit and re-entry are closely linked. Firms with a low exit probability also have a high likelihood of re-entry, and vice versa. However, the way in which firms react to market conditions at the time of exit matters greatly in determining the likelihood of re-entry: thus re-entry depends crucially on the strategic rationale for exit. Our analysis helps explain the opportunistic and intermittent exporting of (mainly) small firms, the demand conditions under which intermittent exporting is most likely to occur, and the firm attributes most likely to give rise to such behavior.

Suggested Citation

  • Michele Bernini & Jun Du & James H. Love, 2016. "Explaining intermittent exporting: Exit and conditional re-entry in export markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(9), pages 1058-1076, December.
  • Handle: RePEc:pal:jintbs:v:47:y:2016:i:9:d:10.1057_s41267-016-0015-2
    DOI: 10.1057/s41267-016-0015-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41267-016-0015-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wennberg, Karl & Holmquist, Carin, 2008. "Problemistic search and international entrepreneurship," European Management Journal, Elsevier, vol. 26(6), pages 441-454, December.
    2. Peter H. Egger & Andrea Lassmann, 2015. "The Causal Impact of Common Native Language on International Trade: Evidence from a Spatial Regression Discontinuity Design," Economic Journal, Royal Economic Society, vol. 0(584), pages 699-745, May.
    3. Joachim Wagner, 2008. "Export Entry, Export Exit and Productivity in German Manufacturing Industries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 15(2), pages 169-180.
    4. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2004. "Dissecting Trade: Firms, Industries, and Export Destinations," American Economic Review, American Economic Association, vol. 94(2), pages 150-154, May.
    5. Love, James H. & Ganotakis, Panagiotis, 2013. "Learning by exporting: Lessons from high-technology SMEs," International Business Review, Elsevier, vol. 22(1), pages 1-17.
    6. Jan Johanson & Jan-Erik Vahlne, 2009. "The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1411-1431, December.
    7. Gary A Knight & S Tamar Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 124-141, March.
    8. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm‐level Data," The World Economy, Wiley Blackwell, vol. 30(1), pages 60-82, January.
    9. Colantone, I. & Coucke, K. & Sleuwaegen, L., 2008. "Globalisation and firm exit: differences between small and large firms," Vlerick Leuven Gent Management School Working Paper Series 2008-06, Vlerick Leuven Gent Management School.
    10. Luis Filipe Lages & Sandy D Jap & David A Griffith, 2008. "The role of past performance in export ventures: a short-term reactive approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(2), pages 304-325, March.
    11. Belke, Ansgar & Oeking, Anne & Setzer, Ralph, 2015. "Domestic demand, capacity constraints and exporting dynamics: Empirical evidence for vulnerable euro area countries," Economic Modelling, Elsevier, vol. 48(C), pages 315-325.
    12. Robert M. Salomon & J. Myles Shaver, 2005. "Learning by Exporting: New Insights from Examining Firm Innovation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 431-460, June.
    13. Pekka Ilmakunnas & Satu Nurmi, 2010. "Dynamics of Export Market Entry and Exit," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 101-126, March.
    14. Sui Sui & Matthias Baum, 2014. "Internationalization strategy, firm resources and the survival of SMEs in the export market," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(7), pages 821-841, September.
    15. Love, James H. & Mansury, Mica Ariana, 2009. "Exporting and productivity in business services: Evidence from the United States," International Business Review, Elsevier, vol. 18(6), pages 630-642, December.
    16. Francisco Requena-Silvente, 2005. "The Decision to Enter and Exit Foreign Markets: Evidence from U.K. SMEs," Small Business Economics, Springer, vol. 25(3), pages 237-253, October.
    17. Holger Görg & Marina-Eliza Spaliara, 2014. "Financial Health, Exports and Firm Survival: Evidence from UK and French Firms," Economica, London School of Economics and Political Science, vol. 81(323), pages 419-444, July.
    18. Lin, Wen-Ting, 2014. "How do managers decide on internationalization processes? The role of organizational slack and performance feedback," Journal of World Business, Elsevier, vol. 49(3), pages 396-408.
    19. Welch, Catherine L. & Welch, Lawrence S., 2009. "Re-internationalisation: Exploration and conceptualisation," International Business Review, Elsevier, vol. 18(6), pages 567-577, December.
    20. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    21. Crick, Dave, 2004. "U.K. SMEs' decision to discontinue exporting: an exploratory investigation into practices within the clothing industry," Journal of Business Venturing, Elsevier, vol. 19(4), pages 561-587, July.
    22. Pedro S. Martins & Yong Yang, 2015. "Globalized Labour Markets? International Rent Sharing Across 47 Countries," British Journal of Industrial Relations, London School of Economics, vol. 53(4), pages 664-691, December.
    23. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    24. Hashai, Niron & Almor, Tamar, 2004. "Gradually internationalizing 'born global' firms: an oxymoron?," International Business Review, Elsevier, vol. 13(4), pages 465-483, August.
    25. Andrea Bonaccorsi, 1992. "On the Relationship Between Firm Size and Export Intensity," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(4), pages 605-635, December.
    26. Love, James H. & Roper, Stephen & Zhou, Ying, 2016. "Experience, age and exporting performance in UK SMEs," International Business Review, Elsevier, vol. 25(4), pages 806-819.
    27. Marian V Jones & Nicole E Coviello, 2005. "Internationalisation: conceptualising an entrepreneurial process of behaviour in time," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 284-303, May.
    28. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    29. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    30. Majocchi, Antonio & Bacchiocchi, Emanuele & Mayrhofer, Ulrike, 2005. "Firm size, business experience and export intensity in SMEs: A longitudinal approach to complex relationships," International Business Review, Elsevier, vol. 14(6), pages 719-738, December.
    31. Gary A Knight & S Tamer Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(4), pages 334-334, July.
    32. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    33. Olivier Bertrand, 2011. "What goes around, comes around: Effects of offshore outsourcing on the export performance of firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(2), pages 334-344, February.
    34. Blum, Bernardo S. & Claro, Sebastian & Horstmann, Ignatius J., 2013. "Occasional and perennial exporters," Journal of International Economics, Elsevier, vol. 90(1), pages 65-74.
    35. Panagiotis Ganotakis & James H Love, 2012. "Export propensity, export intensity and firm performance: The role of the entrepreneurial founding team," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(8), pages 693-718, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:wdevel:v:117:y:2019:i:c:p:48-60 is not listed on IDEAS
    2. repec:eee:jbrese:v:98:y:2019:i:c:p:489-502 is not listed on IDEAS
    3. Dany Bahar & Samuel Rosenow & Ernesto Stein & Rodrigo Wagner, 2018. "Export Take-Offs and Acceleration: Unpacking Cross-Sector Linkages in the Evolution of Comparative Advantage," CESifo Working Paper Series 7436, CESifo Group Munich.
    4. repec:eee:iburev:v:27:y:2018:i:6:p:1105-1115 is not listed on IDEAS
    5. repec:pal:jintbs:v:50:y:2019:i:3:d:10.1057_s41267-018-0167-3 is not listed on IDEAS
    6. Irina Surdu & Kamel Mellahi & Keith Glaister, 2017. "Once bitten, not necessarily shy? Organisational learning prior experience effects on foreign market re-entry commitment decisions," John H Dunning Centre for International Business Discussion Papers jhd-dp2017-04, Henley Business School, Reading University.
    7. repec:eee:iburev:v:28:y:2019:i:1:p:74-89 is not listed on IDEAS
    8. repec:pal:jintbs:v:50:y:2019:i:3:d:10.1057_s41267-018-0193-1 is not listed on IDEAS
    9. repec:eee:worbus:v:54:y:2019:i:2:p:154-168 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:47:y:2016:i:9:d:10.1057_s41267-016-0015-2. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Mallaigh Nolan). General contact details of provider: http://www.palgrave-journals.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.