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Transport infraestructure, sunk costs and firms' export behaviour

Listed author(s):
  • Holl, Adelheid
  • Carrasco, Raquel
  • Albarrán, Pedro

Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets.

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File URL: http://e-archivo.uc3m.es/bitstream/handle/10016/5207/09-22-13.pdf?sequence=2
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Paper provided by Universidad Carlos III de Madrid. Departamento de Economía in its series UC3M Working papers. Economics with number we092213.

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Date of creation: Jun 2009
Handle: RePEc:cte:werepe:we092213
Contact details of provider: Web page: http://www.eco.uc3m.es/

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