Diversification, Networks and the Survival of Exporting Firms
There is abundant empirical evidence testing models where comparative advantage arises from firm heterogeneity. As of today it is relatively clear who exports and why a firm decides to export. But, what determines the survival of a firm in the export market? This paper exploits a detailed developing economy monthly firm-level dataset for the period 2001 - 2008 in order to explore the importance of trade networks and product and market diversification on the survival of exporting firms.We find that market diversification prevails over product diversification while tradenetwork effects, measured in various ways, are highly correlated to the survival of new exporting firms. From a policy perspective our findings suggest that government aid in the exporting process should focus on expanding into new markets, not on promoting new export products.
|Date of creation:||06 Mar 2011|
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- Josep M Vilarrubia & Rubén Segura-Cayuela, 2008.
"Uncertainty and entry into export markets,"
2008 Meeting Papers
661, Society for Economic Dynamics.
- Arnaud Costinot & Andres Rodriguez-Clare & Costas Arkolakis, 2010.
"New Trade Models, Same Old Gains?,"
2010 Meeting Papers
433, Society for Economic Dynamics.
- Christian Volpe Martincus & Jerónimo Carballo, 2010.
"Beyond The Average Effects: The Distributional Impacts of Export Promotion Programs in Developing Countries,"
IDB Publications (Working Papers)
36718, Inter-American Development Bank.
- Volpe Martincus, Christian & Carballo, Jerónimo, 2010. "Beyond the average effects: The distributional impacts of export promotion programs in developing countries," Journal of Development Economics, Elsevier, vol. 92(2), pages 201-214, July.
- Volpe Martincus, Christian & Carballo, Jerónimo, 2008. "Is export promotion effective in developing countries? Firm-level evidence on the intensive and the extensive margins of exports," Journal of International Economics, Elsevier, vol. 76(1), pages 89-106, September.
- Christian Volpe Martincus & Jerónimo Carballo, 2008. "Survival of New Exporters in Developing Countries: Does it Matter How They Diversify?," IDB Publications (Working Papers) 9291, Inter-American Development Bank.
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