Sequential exporting


Albornoz, Facundo, Pardo, Héctor F. Calvo, Corcos, Gregory and Ornelas, Emanuel (2012) Sequential exporting. Journal of International Economics, 88, (1), 17-31. (doi:10.1016/j.jinteco.2012.02.007).

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Description/Abstract

Many new exporters give up exporting very shortly, despite substantial entry costs; others shoot up foreign sales and expand to new destinations. We develop a model based on experimentation to rationalize these and other dynamic patterns of exporting firms. We posit that individual export profitability, while initially uncertain, is positively correlated over time and across destinations. This leads to “sequential exporting,” where the possibility of profitable expansion at the intensive and extensive margins makes initial entry costs worthwhile despite high failure rates. Firm-level evidence from Argentina's customs, which would be difficult to reconcile with existing models, strongly supports this mechanism

Item Type: Article
ISSNs: 0022-1996 (print)
Keywords: export dynamics, trade liberalization, experimentation, uncertainty
Subjects: H Social Sciences > HB Economic Theory
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
Faculty of Social and Human Sciences > Social Sciences > Economics
ePrint ID: 80134
Date Deposited: 24 Mar 2010
Last Modified: 27 Mar 2014 19:02
Research Funder: ESRC
Projects:
Expected Returns, Limited Asset Market Participation and Background Risk
Funded by: ESRC (RES-061-25-0327)
Led by: Hector Fernando Calvo-Pardo
1 October 2008 to 31 December 2010
Publisher: University of Southampton
URI: http://eprints.soton.ac.uk/id/eprint/80134

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