IDEAS home Printed from
   My bibliography  Save this paper

Sensitivity of the Exporting Economy on the External Shocks: Evidence from Slovene Firms


  • Janez Pra??nikar


  • Velimir Bole


  • Ale?? Ahcan


  • Matja?? Koman



In this paper we investigate the export participation of Slovene firms. We first show that sunk costs are an important factor for explaining the export behavior of Slovene firms. Next we show that when the absorption power of the exporting market declines, firms still trade with their established buyers (hysteresis) despite the fact that due to lower prices their exporting revenues decline. We show that this can be explained with high exit costs, which consist of switching costs (costs of replacing stable buyers with new ones) and cost of reducing the production (compensation money for excess workers) and high re-entry costs.

Suggested Citation

  • Janez Pra??nikar & Velimir Bole & Ale?? Ahcan & Matja?? Koman, 2003. "Sensitivity of the Exporting Economy on the External Shocks: Evidence from Slovene Firms," William Davidson Institute Working Papers Series 2003-634, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2003-634

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    International trade; export; distressed export; entry costs; exit costs; credit raiting;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:wdi:papers:2003-634. 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: (WDI). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.