Export market participation with sunk costs and firm heterogeneity.

Evis Sinani (1) , Bersant Hobdari (2)

1 Department of International Economics and Management
2 Department of International Economics and Management

In this paper we investigate the importance of sunk costs, firm characteristics and spillovers from nearby exporters on a firm's decision to participate in exporting. The empirical analysis involves the estimation of a non-structural, discrete choice, dynamic model with firm heterogeneity. By using panel data for Estonian companies from 1994 to 1999 we find that: (i) both sunk costs and observable firm characteristics are important determinants of export market participation; (ii) previous history matters, in that, if a firm has been exporting the previous period or the period before, it significantly increases the likelihood of the firm exporting in the current period; (iii) larger firms with high capital intensity and foreign ownership are more likely to be exporters; (iv) operating in an export-oriented industry increases a firm's likelihood of exporting.

Mots clés: Social Sciences & Humanities

Evis Sinani, Bersant Hobdari. Export market participation with sunk costs and firm heterogeneity.. Applied Economics, 2008, 42 (25), pp.3195. ⟨10.1080/00036840802112372⟩. ⟨hal-00582215⟩