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The Location of U.S. States' Overseas Office

  • Andrew J. Cassey

    ()

    (School of Economic Sciences, Washington State University)

Forty U.S. states operated an overseas office in 2002. Treating overseas offices as sales offices, I modify Holmes (2005) so oces facilitate exports by reducing the transaction cost of selling abroad. From theory, states operate an office if aggregate savings outweigh operating costs. Exploiting the differences in where states locate offices in the data, and controlling for aggregate characteristics, I estimate the impact of exports on the probability of an office existing. In addition, I find the average state savings from an office is 0.005%--0.009% of exports with a cut-off threshold of $1.0--1.4 billion.

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File URL: http://faculty.ses.wsu.edu/WorkingPapers/Cassey/OverseasOffices_WP2009-10.pdf
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File Function: First version, 2009
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Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2009-10.

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Length: 23 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:wsu:wpaper:cassey-2
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