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Do sunk exporting costs differ among markets? Evidence from Spanish manufacturing firms

Author

Listed:
  • José Vicente Blanes Cristóbal

    (Universidad Pablo Olavide Sevilla (Spain))

  • Marion Dovis

    (Centre d'Economie et de Finances Internationales (France))

  • Juliette Milgram Baleix

    () (Department of Economic Theory and Economic History, University of Granada.)

  • Ana I. Moro Egido

    () (Department of Economic Theory and Economic History, University of Granada.)

Abstract

In this paper, we test the hypothesis of sunk exporting costs differing among markets. We use a sample of Spanish firms from Encuesta sobre Estrategias Empresariales (ESEE) for period 1991-2002. Our results confirm the importance of those sunk costs and demonstrate that they differ depending on the market they export to. Although most of the firms exports to developed markets, the costs to enter (and "to re-enter") are greater in those markets.

Suggested Citation

  • José Vicente Blanes Cristóbal & Marion Dovis & Juliette Milgram Baleix & Ana I. Moro Egido, 2007. "Do sunk exporting costs differ among markets? Evidence from Spanish manufacturing firms," ThE Papers 07/02, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:07/02
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    References listed on IDEAS

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    1. Salvador Barrios & Holger Goerg & Eric Strobl, 2003. "Explaining Firms' Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, September.
    2. Campa, Jose Manuel, 2004. "Exchange rates and trade: How important is hysteresis in trade?," European Economic Review, Elsevier, vol. 48(3), pages 527-548, June.
    3. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    4. 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.
    5. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
    6. Salvador Barrios & Holger Görg & Eric Strobl, "undated". "Explaining Firms' Export Behaviour: The Role of R&D and Spillovers," Working Papers 2001-12, FEDEA.
    7. repec:rus:hseeco:122439 is not listed on IDEAS
    8. Juan A. Máñez & María E. Rochina-Barrachina & Juan A. Sanchis, 2008. "Sunk Costs Hysteresis in Spanish Manufacturing Exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(2), pages 272-294, July.
    9. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    10. José C. Fariñas & Ana Martín-Marcos, 2007. "Exporting and Economic Performance: Firm-level Evidence of Spanish Manufacturing," The World Economy, Wiley Blackwell, vol. 30(4), pages 618-646, April.
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    Citations

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    Cited by:

    1. Gianmarco Ottaviano & Christian Volpe Martincus, 2011. "SMEs in Argentina: who are the exporters?," Small Business Economics, Springer, vol. 37(3), pages 341-361, October.
    2. Fernanda Ricotta, 2016. "Productivity Differences By Export Destination," Working Papers 201601, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    3. Abu Ayob & Shamshubaridah Ramlee & Aisyah Abdul Rahman, 2015. "Financial factors and export behavior of small and medium-sized enterprises in an emerging economy," Journal of International Entrepreneurship, Springer, vol. 13(1), pages 49-66, March.
    4. Viaene, Jean-Marie & Zhao, Laixun, 2015. "Inspection, testing errors and trade in tainted products," Journal of the Japanese and International Economies, Elsevier, vol. 35(C), pages 99-116.
    5. Wei, Xuan & Thornsbury, Suzanne, 2011. "Information Cost As A Prior Hurdle to Exporting," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103622, Agricultural and Applied Economics Association.
    6. Serti, Francesco & Tomasi, Chiara, 2012. "Self selection among different export markets," Economics Letters, Elsevier, vol. 117(1), pages 102-105.
    7. Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Zhu, Susan Chun, 2017. "Global engagement and the occupational structure of firms," European Economic Review, Elsevier, vol. 100(C), pages 273-292.
    8. Gullstrand, Joakim, 2011. "Firm and destination-specific export costs: The case of the Swedish food sector," Food Policy, Elsevier, vol. 36(2), pages 204-213, April.
    9. Xuan Wei & Suzanne Thornsbury & David Schweikhardt, 2017. "Hurdles to Exporting: A Decomposition of Fixed Export Costs," Review of Economics & Finance, Better Advances Press, Canada, vol. 7, pages 1-18, February.
    10. Fakih, Ali & Ghazalian, Pascal L., 2013. "Why Some Firms Export? An Empirical Analysis for Manufacturing Firms in the MENA Region," IZA Discussion Papers 7172, Institute for the Study of Labor (IZA).
    11. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 235-267, June.
    12. Vincenzo Verardi & Joachim Wagner, 2012. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations," The World Economy, Wiley Blackwell, vol. 35(6), pages 694-712, June.
    13. repec:oup:indcch:v:27:y:2018:i:1:p:149-171. is not listed on IDEAS
    14. Iwasaki, Ichiro & Csizmadia, Péter & Illéssy, Miklós & Makó, Csaba & Miklós Szanyi, 2010. "Foreign Direct Investment, Information Spillover, and Export Decision : The Concentric-Circle Model with Application to Hungarian Firm-Level Data," Discussion Paper Series a527, Institute of Economic Research, Hitotsubashi University.
    15. Shevtsova, Yevgeniya, 2015. "International Trade and Productivity: The Role of Industry and Export Destination," MPRA Paper 69793, University Library of Munich, Germany.
    16. Latouche, Karine & Shonkwiler, John Scott & Chevassus-Lozza, Emmanuelle, 2010. "History matters for the export decision and the volume exported: Firm-level evidence from French agri-food firms," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61481, Agricultural and Applied Economics Association.
    17. Juliette Milgram-Baleix, 2009. "Do Spanish firms learn from firms located nearby?," Economic Working Papers at Centro de Estudios Andaluces E2009/09, Centro de Estudios Andaluces.

    More about this item

    Keywords

    Sunk costs; heterogeneity of firms; Regionalism.;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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