IDEAS home Printed from https://ideas.repec.org/p/hhs/sunrpe/2011_0017.html
   My bibliography  Save this paper

Learning to export and the timing of entry to export markets

Author

Listed:

Abstract

Firms that engage in exporting normally enter their first export markets a number of years after beginning to sell locally, then enter subsequent export markets progressively. Standard trade models are essentially static and do not capture these elementary facts about exporting, which biases the estimation of trade patterns and limits understanding of potentially important aspects of firms’ exporting behaviour. This paper proposes a model for the timing of entry to new export markets. The model endogenously generates the timing of entry to each market through a learning mechanism: the fixed cost of entry to a given export market is reduced by the experience gained from having entered other markets. More productive firms are less sensitive to the learning effect and therefore (1) enter markets more quickly and (2) enter larger markets earlier and smaller markets later than less productive firms. These predictions are confirmed using Swedish firm-level data. The latter prediction in particular is difficult to explain using alternative mechanisms and therefore endorses the learning effect as an explanation for the timing of entry. The model additionally predicts that more productive firms export more widely and that firms of all productivity levels enter nearer markets earlier, which are strong features of the data.

Suggested Citation

  • Sheard, Nicholas, 2011. "Learning to export and the timing of entry to export markets," Research Papers in Economics 2011:17, Stockholm University, Department of Economics, revised 20 Apr 2012.
  • Handle: RePEc:hhs:sunrpe:2011_0017
    as

    Download full text from publisher

    File URL: http://www2.ne.su.se/paper/wp11_17_revised3.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, vol. 67(2), pages 373-391, December.
    2. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joachim Wagner, 2015. "A Note on Firm Age and the Margins of Exports: First Evidence from Germany," The International Trade Journal, Taylor & Francis Journals, vol. 29(2), pages 93-102, June.
    2. Muñoz Sepulveda, Jesus Angel & Rodriguez, Diego, 2013. "Geographical and Industrial Spillovers in entry decisions across export markets," MPRA Paper 48063, University Library of Munich, Germany.

    More about this item

    Keywords

    export market entry; learning by exporting; fixed costs; heterogeneous firms;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:sunrpe:2011_0017. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sten Nyberg). General contact details of provider: http://edirc.repec.org/data/neisuse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.