Sequential Exporting �
Firms need to incur substantial sunk costs to break in foreign markets, yet many give up exporting shortly after their �rst experience, which typically involves very small sales. Conversely, other new exporters shoot up their foreign sales and expand to new destinations. We investigate a simple theo...
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ftciteseerx:oai:CiteSeerX.psu:10.1.1.177.9945 2023-05-15T18:12:56+02:00 Sequential Exporting � Facundo Albornoz Héctor F. Calvo Pardo Emanuel Ornelas Gregory Corcos The Pennsylvania State University CiteSeerX Archives 2010 application/pdf http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.177.9945 http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf en eng http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.177.9945 http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf Metadata may be used without restrictions as long as the oai identifier remains attached to it. http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf JEL Codes L21 F13 F15 D83 Keywords Export dynamics trade liberalization experimentation uncertainty We thank Costas Arkolakis Sami Berlinski David Atkin Jordi Blanes-i-Vidal John Bluedorn Holger Breinlich text 2010 ftciteseerx 2016-01-07T16:19:19Z Firms need to incur substantial sunk costs to break in foreign markets, yet many give up exporting shortly after their �rst experience, which typically involves very small sales. Conversely, other new exporters shoot up their foreign sales and expand to new destinations. We investigate a simple theoretical mechanism that can rationalize these patterns. A �rm discovers its pro�tability as exporter only after actually engaging in exporting. The pro�tability is positively correlated over time and across destinations. Accordingly, once the �rm learns how good it is as an exporter, it adjusts quantities and decides whether to exit and whether to serve new destinations. Thus, it is the possibility of pro�table expansion at both the intensive and extensive margins what makes incurring the sunk costs to enter a single foreign market worthwhile despite the high failure rates. Using a census of Argentinean �rm-level manufacturing exports from 2002 to 2007, we �nd empirical support for several implications of our proposed mechanism, indicating that the practice of “sequential exporting ” is pervasive. Sequential exporting has broad but subtle implications for trade policy. For example, a reduction in trade barriers in a country has delayed entry e�ects in its own market, while also promoting entry in other markets. This trade externality poses challenges for the quanti�cation of the e�ects of trade liberalization programs, while suggesting neglected but critical implications of international trade agreements. Text sami Unknown |
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English |
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JEL Codes L21 F13 F15 D83 Keywords Export dynamics trade liberalization experimentation uncertainty We thank Costas Arkolakis Sami Berlinski David Atkin Jordi Blanes-i-Vidal John Bluedorn Holger Breinlich |
spellingShingle |
JEL Codes L21 F13 F15 D83 Keywords Export dynamics trade liberalization experimentation uncertainty We thank Costas Arkolakis Sami Berlinski David Atkin Jordi Blanes-i-Vidal John Bluedorn Holger Breinlich Facundo Albornoz Héctor F. Calvo Pardo Emanuel Ornelas Gregory Corcos Sequential Exporting � |
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JEL Codes L21 F13 F15 D83 Keywords Export dynamics trade liberalization experimentation uncertainty We thank Costas Arkolakis Sami Berlinski David Atkin Jordi Blanes-i-Vidal John Bluedorn Holger Breinlich |
description |
Firms need to incur substantial sunk costs to break in foreign markets, yet many give up exporting shortly after their �rst experience, which typically involves very small sales. Conversely, other new exporters shoot up their foreign sales and expand to new destinations. We investigate a simple theoretical mechanism that can rationalize these patterns. A �rm discovers its pro�tability as exporter only after actually engaging in exporting. The pro�tability is positively correlated over time and across destinations. Accordingly, once the �rm learns how good it is as an exporter, it adjusts quantities and decides whether to exit and whether to serve new destinations. Thus, it is the possibility of pro�table expansion at both the intensive and extensive margins what makes incurring the sunk costs to enter a single foreign market worthwhile despite the high failure rates. Using a census of Argentinean �rm-level manufacturing exports from 2002 to 2007, we �nd empirical support for several implications of our proposed mechanism, indicating that the practice of “sequential exporting ” is pervasive. Sequential exporting has broad but subtle implications for trade policy. For example, a reduction in trade barriers in a country has delayed entry e�ects in its own market, while also promoting entry in other markets. This trade externality poses challenges for the quanti�cation of the e�ects of trade liberalization programs, while suggesting neglected but critical implications of international trade agreements. |
author2 |
The Pennsylvania State University CiteSeerX Archives |
format |
Text |
author |
Facundo Albornoz Héctor F. Calvo Pardo Emanuel Ornelas Gregory Corcos |
author_facet |
Facundo Albornoz Héctor F. Calvo Pardo Emanuel Ornelas Gregory Corcos |
author_sort |
Facundo Albornoz |
title |
Sequential Exporting � |
title_short |
Sequential Exporting � |
title_full |
Sequential Exporting � |
title_fullStr |
Sequential Exporting � |
title_full_unstemmed |
Sequential Exporting � |
title_sort |
sequential exporting � |
publishDate |
2010 |
url |
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.177.9945 http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf |
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http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf |
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http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.177.9945 http://www.cepii.fr/%5C/anglaisgraph/communications/pdf/2010/corcos_albornoz_calvo_ornelas.pdf |
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Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
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