Firm and destination-specific export costs: The case of the Swedish food sector

Gullstrand, Joakim

doi:10.1016/j.foodpol.2010.11.017

Cited by 22 publications

(18 citation statements)

References 30 publications

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“…In another seminal paper, Bernard and Jensen (2004) find that past export experience increases the probability of exporting by about 30 per cent for American manufacturing plants. Gullstrand (2011) confirms the importance of sunk costs by using a data set of Swedish firm-destination specific exports in the food and beverage sector. The general conclusion from these and other papers in the sunk cost literature is therefore that sunk costs matter in international trade.…”

Section: Introductionsupporting

confidence: 62%

“…When it comes to export performance, the food chain resembles the behaviour of firms in other sectors and countries. That is, few exporters and a skewed export pattern (see Gullstrand, 2011). The share of exporters in all parts of the food chain was around 15 per cent in 2003.…”

Section: Datamentioning

confidence: 99%

“…In addition to spell dummies in order to capture experience and increased brand loyalty, we incorporate the sequence of exporting a product to a particular market by adding dummies for whether the current trade spell is the second, third or even fourth time that the same firm exports the same product to the same market. Just as earlier export experiences tend to increase the probability of entering a product-destination (see Roberts and Tybout, 1997;Bernard and Jensen, 2004;Gullstrand, 2011), earlier product-destination experiences may prolong the duration of an export activity.…”

Section: Firm and Product Characteristicsmentioning

confidence: 99%

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How to Combine High Sunk Costs of Exporting and Low Export Survival

Gullstrand

Persson

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn endeavouring to explain the empirical puzzle that the sunk costs of exporting are important, but that, at the same time, trade flows do not, on average, survive for very long, this paper explores the concepts of core and peripheral markets. First, it illustrates that if the importance of sunk costs as well as the expected future returns from exporting are different, depending on whether the export decision refers to a core or a peripheral market, it is plausible that while firms will tend to stay on the core market for a long time, they will enter and exit the peripheral market much more frequently. Second, using firm-product-destination-specific export data for all firms in the Swedish food chain for the period 1997-2007, an empirical test is carried out to ascertain whether there is support for the hypothesis that trade duration will be longer for core markets. Employing two variables that capture different aspects of the core/periphery dimension, it is found that firms will indeed tend to stay longer in their core markets, while export decisions regarding peripheral markets are much less long-term. The conclusion, therefore, is that the empirical puzzle can be explained by taking into account the fact that the trade hysteresis literature builds on data on the core market decision to export or not, and that the trade survival literature also includes data on decisions to stay in or exit peripheral markets. JEL classification: F10; F14

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Section: Introductionsupporting

confidence: 62%

Section: Datamentioning

confidence: 99%

Section: Firm and Product Characteristicsmentioning

confidence: 99%

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How to Combine High Sunk Costs of Exporting and Low Export Survival

Gullstrand

Persson

2013

SSRN Journal

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“…Moreover, consumer participation in the service provision, together with transportation and communication costs, make the provision of services in foreign markets -both nearby and distant countries -even more difficult (Balabanis, 2000;Head, Mayer, & Ries, 2009;Manning, Roza, Lewin, & Volberda, 2013;Sarathy, 1994). Apart from physical distance, cultural differences further exacerbate the extent of sunk costs (Disdier & Mayer, 2007;Ellis, 2007;Guiso, Sapienza, & Zingales, 2009;Gullstrand, 2011). In the case of services, culture may indeed have a strong influence on consumers' perception of service quality.…”

Section: The Extent Of the Spillover Effectmentioning

confidence: 99%

Spillovers through backward linkages and the export performance of business services. Evidence from a sample of Italian firms

Conti¹,

Turco²,

Maggioni³

2014

International Business Review

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We provide evidence on the role of spillovers through vertical linkages in service firms' internationalisation process. We combine input-output coefficients with region-level information on downstream manufacturing sector exports to build a measure of spillovers through backward linkages, which we assess as a systematic determinant of Italian BS firms' export status. Once considered firm and sector specificities, export spillovers especially matter for exporting to high-income economies outside Europe. This finding originates from higher sunk costs stemming from greater distance to the destination market and tougher competition within the destination market. Furthermore, the spillovers' geographical scope is mainly local. We thus contribute to international business theory by generalising existing evidence from case studies on the importance of buyer-supplier relationships for service firms' internationalisation across several BS sectors. Our research carries important implications for international business practices as well, as joining networks with internationalised customers may play an important role in enhancing BS firms' exports, regardless of the BS supplied. © 2013 Elsevier Ltd

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“… However, there exists a small but growing literature investigating the relationship between trade and productivity in the food industry, within the framework of firm heterogeneity trade models (see Ruan and Gopinath, ; Gullstrand, ; Chevassus‐Lozza and Latouche, ; Curzi and Olper, ; Olper et al ., ; Curzi et al ., ). …”

mentioning

confidence: 99%

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Olper¹,

Curzi²,

Raimondi³

2016

J Agricultural Economics

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Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.

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Firm and destination-specific export costs: The case of the Swedish food sector

Cited by 22 publications

References 30 publications

How to Combine High Sunk Costs of Exporting and Low Export Survival

How to Combine High Sunk Costs of Exporting and Low Export Survival

Spillovers through backward linkages and the export performance of business services. Evidence from a sample of Italian firms

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

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