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The Impact of Trade Costs on Firm Entry, Exporting, and Survival in Korea

  • Kim, Sooil
  • Reimer, Jeffrey J.
  • Gopinath, Munisamy

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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File URL: http://purl.umn.edu/49185
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Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49185.

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Date of creation: 2009
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Handle: RePEc:ags:aaea09:49185
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  1. David S. Jacks & Christopher M. Meissner & Dennis Novy, 2006. "Trade Costs in the First Wave of Globalization," NBER Working Papers 12602, National Bureau of Economic Research, Inc.
  2. Dennis Novy, 2012. "Gravity Redux: Measuring International Trade Costs with Panel Data," CEP Discussion Papers dp1114, Centre for Economic Performance, LSE.
  3. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jenson & Samuel Kortum, 2000. "Plants and Productivity in International Trade," NBER Working Papers 7688, National Bureau of Economic Research, Inc.
  4. Chambers, Robert G. & Fare, Rolf & Grosskopf, Shawna, 1996. "Productivity Growth in APEC Countries," Working Papers 197843, University of Maryland, Department of Agricultural and Resource Economics.
  5. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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