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Export Experience, Product Differentiation and Firm Survival in Export Markets

Author

Listed:
  • Tomohiko Inui

    (Gakushuin University and Research Institute of Economy, Trade and Industry)

  • Keiko Ito

    (Senshu University)

  • Daisuke Miyakawa

    (Hitotsubashi University)

Abstract

This paper examines the determinants of firm survival in export markets by explicitly taking into account the impact of firms’ previous export market experience and their product differentiation. Utilizing a 16-year panel data set for Japanese manufacturing firms, we employ panel probit estimation to examine the likelihood of exit from export markets. The results of our estimations show, first, that the exit probability from export markets decreased over the export duration. Second, the probability of exiting from export markets tended to be lower when firms were more R&D intensive both prior to and after starting exporting. The first result implies that exporting experience plays an important role in firms’ survival in export markets. Our second result implies that firms producing differentiated products likely have a greater incentive to make upfront investments to start exporting, and these investments, in turn, enable such firms to survive in export markets for a longer period.

Suggested Citation

  • Tomohiko Inui & Keiko Ito & Daisuke Miyakawa, 2017. "Export Experience, Product Differentiation and Firm Survival in Export Markets," The Japanese Economic Review, Springer, vol. 68(2), pages 217-231, June.
  • Handle: RePEc:spr:jecrev:v:68:y:2017:i:2:d:10.1111_jere.12083
    DOI: 10.1111/jere.12083
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    Cited by:

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    2. Martina Lawless & Zuzanna Studnicka, 2019. "Products or Markets: What Type of Experience Matters for Export Survival?," Working Papers 201923, School of Economics, University College Dublin.
    3. Silviano Esteve‐Pérez, 2021. "Previous experience, experimentation and export survival: Evidence from firm‐product‐destination level data," The World Economy, Wiley Blackwell, vol. 44(9), pages 2638-2682, September.
    4. Ketan Reddy & Subash Sasidharan, 2022. "Servicification and global value chain survival: Firm‐level evidence from India," Australian Economic Papers, Wiley Blackwell, vol. 61(3), pages 455-473, September.
    5. Ito, Tadashi & Nakamura, Ryohei & Morita, Manabu, 2021. "Wholesalers, indirect exports, geography, and economies of scope: Evidence from firm transaction data in Japan," Japan and the World Economy, Elsevier, vol. 58(C).
    6. INUI Tomohiko & Young Gak KIM, 2020. "Exchange Rates, International Outsourcing, and Firm Export Dynamics," Discussion papers 20083, Research Institute of Economy, Trade and Industry (RIETI).
    7. Reddy, Ketan & Sasidharan, Subash, 2023. "Innovative efforts and export market survival: Evidence from an emerging economy," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    8. Quang Hoan Truong & Van Chung Dong, 2021. "Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam," Working Papers DP-2021-43, Economic Research Institute for ASEAN and East Asia (ERIA).
    9. Zou, Zongsen & Zhang, Yu & Li, Xin & Wang, Xiuling, 2023. "The nexus between product sophistication and export survival: Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 480-502.
    10. Majune Kraido Socrates & Eliud Moyi & Kamau Gathiaka, 2020. "Explaining Export Duration in Kenya," South African Journal of Economics, Economic Society of South Africa, vol. 88(2), pages 204-224, June.
    11. Jeong, Jaehoon & Yang, Jae-Suk, 2023. "Why do some firms stop exporting?," International Business Review, Elsevier, vol. 32(4).
    12. Syden Mishi & Weliswa Matekenya & Leward Jeke & Ronney M. Ncwadi & Roseline T. Karambakuwa, 2021. "Firm and product survival analysis: Evidence from South African tax administrative and products data," WIDER Working Paper Series wp-2021-107, World Institute for Development Economic Research (UNU-WIDER).
    13. Subash Sasidharan & Ketan Reddy, 2021. "Innovation, Product Sophistication and Export Market Survival: A Study of Indian Manufacturing," Working Papers DP-2021-45, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    F14; C41;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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