Author: Mark J. Roberts
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 44
Book Description
March 1995 Exports respond unpredictably to a change in real exchange rates, suggests evidence from the 1980s. Recent theoretical work explains this as a consequence of the sunk costs associated with breaking into foreign markets. Sunk costs include the cost of packaging, upgrading product quality, establishing marketing channels, and accumulating information on demand sources. The authors use micro panel data to estimate a dynamic discrete-choice model of participation in export markets, a model derived from the Krugman-Baldwin sunk-cost hysteresis framework. Applying the model to data on manufacturing plants in Colombia (1981-89), they test for the presence of sunk entry costs and quantify the importance of those costs in explaining export patterns. The econometric results reject the hypothesis that sunk costs are zero. The results, which control for both observed and unobserved sources of plant heterogeneity, indicate that prior export market experience has a substantial effect on the probability of exporting, but its effect depreciates fairly quickly. The reentry costs of plants that have been out of the export market for a year are substantially lower than the costs of a first-time exporter. After a year out of the export market, however, the reentry costs are not significantly different from the entry costs. Plant characteristics are also associated with export behavior: large old plants owned by corporations are more likely to export than other plants. Variations in plant-level cost and demand conditions have much less effect on the profitability of exporting than variations in macroeconomic conditions and sunk costs do. It appears especially difficult to break into foreign markets during periods of world recession.
An Empirical Model of Sunk Costs and the Decision to Export
Author: Mark J. Roberts
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 44
Book Description
March 1995 Exports respond unpredictably to a change in real exchange rates, suggests evidence from the 1980s. Recent theoretical work explains this as a consequence of the sunk costs associated with breaking into foreign markets. Sunk costs include the cost of packaging, upgrading product quality, establishing marketing channels, and accumulating information on demand sources. The authors use micro panel data to estimate a dynamic discrete-choice model of participation in export markets, a model derived from the Krugman-Baldwin sunk-cost hysteresis framework. Applying the model to data on manufacturing plants in Colombia (1981-89), they test for the presence of sunk entry costs and quantify the importance of those costs in explaining export patterns. The econometric results reject the hypothesis that sunk costs are zero. The results, which control for both observed and unobserved sources of plant heterogeneity, indicate that prior export market experience has a substantial effect on the probability of exporting, but its effect depreciates fairly quickly. The reentry costs of plants that have been out of the export market for a year are substantially lower than the costs of a first-time exporter. After a year out of the export market, however, the reentry costs are not significantly different from the entry costs. Plant characteristics are also associated with export behavior: large old plants owned by corporations are more likely to export than other plants. Variations in plant-level cost and demand conditions have much less effect on the profitability of exporting than variations in macroeconomic conditions and sunk costs do. It appears especially difficult to break into foreign markets during periods of world recession.
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 44
Book Description
March 1995 Exports respond unpredictably to a change in real exchange rates, suggests evidence from the 1980s. Recent theoretical work explains this as a consequence of the sunk costs associated with breaking into foreign markets. Sunk costs include the cost of packaging, upgrading product quality, establishing marketing channels, and accumulating information on demand sources. The authors use micro panel data to estimate a dynamic discrete-choice model of participation in export markets, a model derived from the Krugman-Baldwin sunk-cost hysteresis framework. Applying the model to data on manufacturing plants in Colombia (1981-89), they test for the presence of sunk entry costs and quantify the importance of those costs in explaining export patterns. The econometric results reject the hypothesis that sunk costs are zero. The results, which control for both observed and unobserved sources of plant heterogeneity, indicate that prior export market experience has a substantial effect on the probability of exporting, but its effect depreciates fairly quickly. The reentry costs of plants that have been out of the export market for a year are substantially lower than the costs of a first-time exporter. After a year out of the export market, however, the reentry costs are not significantly different from the entry costs. Plant characteristics are also associated with export behavior: large old plants owned by corporations are more likely to export than other plants. Variations in plant-level cost and demand conditions have much less effect on the profitability of exporting than variations in macroeconomic conditions and sunk costs do. It appears especially difficult to break into foreign markets during periods of world recession.
An Empirical Model of Sunk Costs and the Decision to Export
Author: Mark J. Roberts
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
Book Description
Exports respond unpredictably to a change in real exchange rates, suggests evidence from the 1980s.Recent theoretical work explains this as a consequence of the sunk costs associated with breaking into foreign markets. Sunk costs include the cost of packaging, upgrading product quality, establishing marketing channels, and accumulating information on demand sources. The authors use micro panel data to estimate a dynamic discrete - choice model of participation in export markets, a model derived from the Krugman-Baldwin sunk - cost hysteresis framework. Applying the model to data on manufacturing plants in Colombia (1981-89), they test for the presence of sunk entry costs and quantify the importance of those costs in explaining export patterns. The econometric results reject the hypothesis that sunk costs are zero. The results, which control for both observed and unobserved sources of plant heterogeneity, indicate that prior export market experience has a substantial effect on the probability of exporting, but its effect depreciates fairly quickly. The reentry costs of plants that have been out of the export market for a year are substantially lower than the costs of a first-time exporter. After a year out of the export market, however, the reentry costs are not significantly different from the entry costs. Plant characteristics are also associated with export behavior: large old plants owned by corporations are more likely to export than other plants. Variations in plant-level cost and demand conditions have much less effect on the profitability of exporting than variations in macroeconomic conditions and sunk costs do. It appears especially difficult to break into foreign markets during periods of world recession.
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
Book Description
Exports respond unpredictably to a change in real exchange rates, suggests evidence from the 1980s.Recent theoretical work explains this as a consequence of the sunk costs associated with breaking into foreign markets. Sunk costs include the cost of packaging, upgrading product quality, establishing marketing channels, and accumulating information on demand sources. The authors use micro panel data to estimate a dynamic discrete - choice model of participation in export markets, a model derived from the Krugman-Baldwin sunk - cost hysteresis framework. Applying the model to data on manufacturing plants in Colombia (1981-89), they test for the presence of sunk entry costs and quantify the importance of those costs in explaining export patterns. The econometric results reject the hypothesis that sunk costs are zero. The results, which control for both observed and unobserved sources of plant heterogeneity, indicate that prior export market experience has a substantial effect on the probability of exporting, but its effect depreciates fairly quickly. The reentry costs of plants that have been out of the export market for a year are substantially lower than the costs of a first-time exporter. After a year out of the export market, however, the reentry costs are not significantly different from the entry costs. Plant characteristics are also associated with export behavior: large old plants owned by corporations are more likely to export than other plants. Variations in plant-level cost and demand conditions have much less effect on the profitability of exporting than variations in macroeconomic conditions and sunk costs do. It appears especially difficult to break into foreign markets during periods of world recession.
An Empirical Model of Sunk Costs and the Decision to Export
Author: Mark J. Roberts
Publisher:
ISBN:
Category : Costs, Industrial
Languages : en
Pages : 52
Book Description
Publisher:
ISBN:
Category : Costs, Industrial
Languages : en
Pages : 52
Book Description
Sunk costs of exports
Author: Matteo Bugamelli
Publisher:
ISBN:
Category : Exports
Languages : it
Pages : 60
Book Description
Publisher:
ISBN:
Category : Exports
Languages : it
Pages : 60
Book Description
Do Sunk Costs of Exporting Matter for Net Export Dynamics?
Author: George Alessandria
Publisher:
ISBN:
Category : Exports
Languages : en
Pages : 42
Book Description
Publisher:
ISBN:
Category : Exports
Languages : en
Pages : 42
Book Description
Are Sunk Costs in Exporting Country Specific?
Author: Andreas Moxnes
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Previous studies have shown that there are significant sunk entry costs in exporting. However, the empirical literature has not addressed whether these costs are global or country specific. In this paper, I show that both are present and estimate that country-specific costs are about three times the magnitude of global costs. Furthermore, I show that international standards harmonization has strong positive effects on imported variety in small and remote markets. Calibration of a modified Chaney (2008) model indicates that these markets will gain access to 3-4% more imported varieties when global costs increase by 10%, holding total entry costs constant. (Des travaux antérieurs ont montré qu'il y a des coûts irrécupérables importants pour se lancer dans l'exportation. Cependant ils n'ont pas étudié si c'étaient des coûts globaux communs à tous les marchés d'exportation ou s'ils étaient spécifiques à des pays particuliers. Dans ce texte, on montre que les deux types de coûts sont présents, et on estime que les coûts spécifiques aux pays sont trois fois plus grands que les coûts communs. De plus, on montre que l'harmonisation des standards internationaux a des effets positifs importants sur la variété importée dans les marchés petits et éloignés. La calibration d'un modèle modifié de indique que ces marchés vont avoir accès à 3-4% de plus de variétés importées quand les coûts globaux communs s'accroissent de 10% - gardant les coûts d'entrée totaux constants.).
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Previous studies have shown that there are significant sunk entry costs in exporting. However, the empirical literature has not addressed whether these costs are global or country specific. In this paper, I show that both are present and estimate that country-specific costs are about three times the magnitude of global costs. Furthermore, I show that international standards harmonization has strong positive effects on imported variety in small and remote markets. Calibration of a modified Chaney (2008) model indicates that these markets will gain access to 3-4% more imported varieties when global costs increase by 10%, holding total entry costs constant. (Des travaux antérieurs ont montré qu'il y a des coûts irrécupérables importants pour se lancer dans l'exportation. Cependant ils n'ont pas étudié si c'étaient des coûts globaux communs à tous les marchés d'exportation ou s'ils étaient spécifiques à des pays particuliers. Dans ce texte, on montre que les deux types de coûts sont présents, et on estime que les coûts spécifiques aux pays sont trois fois plus grands que les coûts communs. De plus, on montre que l'harmonisation des standards internationaux a des effets positifs importants sur la variété importée dans les marchés petits et éloignés. La calibration d'un modèle modifié de indique que ces marchés vont avoir accès à 3-4% de plus de variétés importées quand les coûts globaux communs s'accroissent de 10% - gardant les coûts d'entrée totaux constants.).
Sunk Costs of Exporting and the Role of Experience in International Trade
Author: Philipp Meinen
Publisher:
ISBN:
Category :
Languages : fr
Pages : 0
Book Description
French Abstract: Les coûts irrécupérables pour exporter et le rôle de l'expérience dans le commerce international. Ce texte évalue l'importance des coûts irrécupérables pour exporter vers des destinations spécifiques, et le rôle de l'expérience de la firme dans le commerce international dans la décision d'exporter dans un marché particulier. Les coûts irrécupérables sont importants mais l'expérience de la firme peut aider à supporter ces coûts plus facilement. En particulier, l'expérience d'importation en provenance d'un marché peut faciliter l'exportation vers ce marché, et l'expérience d'exportation vers d'autres marchés peut accroître la probabilité d'exporter vers un pays particulier. Ce dernier effet dépend des caractéristiques et du nombre de marchés servis par une firme.
Publisher:
ISBN:
Category :
Languages : fr
Pages : 0
Book Description
French Abstract: Les coûts irrécupérables pour exporter et le rôle de l'expérience dans le commerce international. Ce texte évalue l'importance des coûts irrécupérables pour exporter vers des destinations spécifiques, et le rôle de l'expérience de la firme dans le commerce international dans la décision d'exporter dans un marché particulier. Les coûts irrécupérables sont importants mais l'expérience de la firme peut aider à supporter ces coûts plus facilement. En particulier, l'expérience d'importation en provenance d'un marché peut faciliter l'exportation vers ce marché, et l'expérience d'exportation vers d'autres marchés peut accroître la probabilité d'exporter vers un pays particulier. Ce dernier effet dépend des caractéristiques et du nombre de marchés servis par une firme.
Sunk Costs, Choice of Export Channels and Switching Regimes in Korean Small and Medium-sized Enterprises' Exporting
Author: Seung-Jae Yhee
Publisher:
ISBN:
Category :
Languages : en
Pages : 386
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 386
Book Description
Market-Specific Sunk Export Costs
Author: Per Botolf Maurseth
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Firms may face sunk costs when entering an export market. Previous studies have focused on global or country-specific sunk export costs. This study analyses the importance of market-specific sunk export costs (defining 'market' as a product-country combination). We also study how market-specific export costs can be affected by various kinds of learning and spillover effects. We use firm-level panel data for Norwegian seafood exports distributed on products and countries. The results lend support to the hypothesis of market-specific sunk costs. We also find evidence of learning and spillover effects, particularly within the same product group.
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Firms may face sunk costs when entering an export market. Previous studies have focused on global or country-specific sunk export costs. This study analyses the importance of market-specific sunk export costs (defining 'market' as a product-country combination). We also study how market-specific export costs can be affected by various kinds of learning and spillover effects. We use firm-level panel data for Norwegian seafood exports distributed on products and countries. The results lend support to the hypothesis of market-specific sunk costs. We also find evidence of learning and spillover effects, particularly within the same product group.
Sunk Costs in the Exporting Activity
Author: Arne Melchior
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
Book Description