Sequential exporting
Sequential exporting
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
export dynamics, trade liberalization, experimentation, uncertainty
17-31
Albornoz, Facundo
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Pardo, Héctor F. Calvo
07a586f0-48ec-4049-932e-fb9fc575f59f
Corcos, Gregory
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Ornelas, Emanuel
cf4f6d37-09cc-4774-838e-2d5b98ce5828
Albornoz, Facundo
cfb2a97e-744b-4609-b517-9a5627139f20
Pardo, Héctor F. Calvo
07a586f0-48ec-4049-932e-fb9fc575f59f
Corcos, Gregory
e7e96cdd-60e1-48d3-9bf9-fc87ed024c05
Ornelas, Emanuel
cf4f6d37-09cc-4774-838e-2d5b98ce5828
Albornoz, Facundo, Pardo, Héctor F. Calvo, Corcos, Gregory and Ornelas, Emanuel
(2012)
Sequential exporting.
Journal of International Economics, 88 (1), .
(doi:10.1016/j.jinteco.2012.02.007).
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
Text
Sequential_Exporting.pdf
- Author's Original
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e-pub ahead of print date: 20 February 2012
Keywords:
export dynamics, trade liberalization, experimentation, uncertainty
Organisations:
Economics
Identifiers
Local EPrints ID: 80134
URI: http://eprints.soton.ac.uk/id/eprint/80134
ISSN: 0022-1996
PURE UUID: f886db7b-6909-4d1f-b909-5c025d1ae558
Catalogue record
Date deposited: 24 Mar 2010
Last modified: 14 Mar 2024 02:51
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Contributors
Author:
Facundo Albornoz
Author:
Gregory Corcos
Author:
Emanuel Ornelas
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