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The Role of Entry Costs and He terogeneous Characteristics of Firms in the Decision to Export: Empirical Evidence from Firm-level Data in Vietnam

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  • Nguyen HIEP
  • Hiroshi OHTA

Abstract

This paper contributes to the examination of factors that affect the decision to export of firms. Using a panel of firm-level data in Vietnam's manufacturing sector, we test for the role of sunk costs and heterogeneous characteristics of firms in determining firms' probability of exporting. Under a framework that controls for unobserved heterogeneity among firms, we find that the sunk entry costs are important factor that makes export status highly persistent in Vietnam. Firm size, firm age and foreign ownership are positively related to export probability of firms, while total factor productivity has no statistically significant effect. Besides, firms with labor-intensive technology, more skilled labors or competitive labor service are more likely to export.

Suggested Citation

  • Nguyen HIEP & Hiroshi OHTA, 2007. "The Role of Entry Costs and He terogeneous Characteristics of Firms in the Decision to Export: Empirical Evidence from Firm-level Data in Vietnam," GSICS Working Paper Series 17, Graduate School of International Cooperation Studies, Kobe University.
  • Handle: RePEc:kcs:wpaper:17
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    File URL: http://www.research.kobe-u.ac.jp/gsics-publication/gwps/2007-17.pdf
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    References listed on IDEAS

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    1. Dijk, van M., 2001. "The Determinants of Export Performance in Developing Countries: The Case of Indonesian Manufacturing," Working Papers 02.01, Eindhoven Center for Innovation Studies.
    2. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 903-947.
    3. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-688, November.
    4. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 295-316.
    5. Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
    6. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
    7. Joze P. Damijan & Saso Polanec & Janez Prasnikar, 2004. "Self-selection, Export Market Heterogeneity and Productivity Improvements: Firm Level Evidence from Slovenia," LICOS Discussion Papers 14804, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    8. A. Gourlay & J. Seaton, 2004. "Explaining the decision to export: evidence from UK firms," Applied Economics Letters, Taylor & Francis Journals, vol. 11(3), pages 153-158.
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    Cited by:

    1. Belke, Ansgar & Kronen, Dominik, 2017. "Exchange rate bands of inaction and hysteresis in EU exports to the global economy: The role of uncertainty," Ruhr Economic Papers 695, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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