Temporary trade and heterogeneous firms

Békés, Gábor; Muraközy, Balázs

doi:10.1016/j.jinteco.2011.12.007

“…They find an informational externality according to which the probability of survival upon entry in a new market increases in the number of competitors from the same country already serving that market. Closer to our analysis, Békés and Muraközy (2012) find that firm productivity, financial stability, and GDP of the destination country are determinants of export survival.…”

mentioning

confidence: 65%

Survival in export markets

Albornoz

¹

,

Fanelli

²

,

Hallak

³

2016

Journal of International Economics

View full text Add to dashboard Cite

This paper explores the determinants of firms' survival in export markets. In our theoretical framework, firm profitability is characterized by a general parameter that follows a geometric Brownian motion process and a set of market specific components that are fixed over time. Exporting involves sunk and fixed costs, which vary across destinations but are the same across firms. We derive the probability of survival upon entry in a given market. This probability is common to all firms despite their market specific profitability fixed component. Hence, export survival only depends on the magnitude of sunk and fixed costs. The predictions on their effects are opposite: the probability of survival increases with the sunk cost and decreases with the fixed cost, but only if sunk costs are positive. We test these predictions using Argentine customs data. We use distance and export experience as proxies for both fixed and sunk costs. The probability of survival decreases with distance and is higher for experienced firms. These results indicate that fixed costs prevail over sunk costs to explain cross-country variation in survival probabilities and variation in these probabilities between experienced and inexperienced firms.JEL codes: F10, F12, F14

show abstract

“…Eaton et al (2008) show, using Colombian data, that nearly one half of all new exporters stops exporting after just one year, and total exports are dominated by a small number of large and stable exporters. 51 Békés and Muraközy (2012) shows, using Hungarian data, that temporary trade is a pervasive feature of the data which is characterized by a number of specificities in terms of the firms, markets, and products involved. Therefore, a concern could be whether our results are sensitive to the the presence of short-lived export participation.…”

Section: Caveats and Further Discussionmentioning

confidence: 99%

Managers' mobility, trade performance, and wages

Mion

¹

,

Opromolla

²

2014

Journal of International Economics

View full text Add to dashboard Cite

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. The objective of CompNet is to develop a more consistent analytical framework for assessing competitiveness, one which allows for a better correspondence between determinants and outcomes. Terms of use: Documents in EconStor mayThe research is carried out in three workstreams: 1) Aggregate Measures of Competitiveness; 2) Firm Level; 3) Global Value Chains CompNet is chaired by Filippo di Mauro (ECB). The three workstreams are headed respectively by Chiara Osbat (ECB), Antoine Berthou (Banque de France) and João Amador (Banco de Portugal). Julia Fritz (ECB) is responsible for the CompNet Secretariat.The refereeing process of this paper has been coordinated by Editorial Board of the ECB Working Paper Series, led by Philipp Hartmann.The paper is released in order to make the research of CompNet generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the ones of the author(s) and do not necessarily reflect those of the ECB, the ESCB, and of other organisations associated with the Network. AcknowledgementsWe Abstract: Knowledge is key to the success of a firm. Firms and their managers acquire knowledge via channels which are often difficult to track down and quantify. By matching employer-employee data with trade data at the firm level we show that the export experience acquired by managers in previous firms leads their current firm towards higher export performance, and commands a sizeable wage premium for the manager. Export knowledge is decisive when it is market-specific: managers with experience related to markets served by their current firm receive an even higher wage premium; firms are more likely to enter markets where their managers have experience; exporters are more likely to stay in those markets, and their sales are on average higher. Our findings are robust to controlling for endogeneity. The impact of managers' export experience on a firm's export performance is at least as strong as that of firm productivity.Keywords: Managers, firm trade performance, job mobility, export experience, wage premium JEL classification: M2, L2, F16, J31, J62 NON-TECHNICAL SUMMARYA growing literature in economics explores how the management of a firm affects its performance. Empirical studies have exploited the increasing availability of information on managerial practices and managers' characteristics to establish a strong connection with firm-as well as a country-productivity...

show abstract

“…Finally the present model as well as our empirical investigation ignore the role of multi-product firms and product exit as opposed to firm exit. Moreover, an additional perspective would be the link between firm closure and the preceding export market serving pattern, thereby exploring the role of temporary exports in the sense of Békés and Muraközy (2012), and by contrasting it to export market exit. Future research will have to examine such extensions.…”

Section: Firm Deathmentioning

confidence: 99%

Export Market Exit and Firm Survival: Theory and First Evidence

Hiller¹,

Schröder

²

,

Sørensen

³

2017

View full text Add to dashboard Cite

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. (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress. The model predicts -inter alia -that a higher relative productivity not only increases the likelihood of exporting, but also the chances of firm survival and continued export market engagements. We relate these predictions to the empirical stylized facts of export market exit and firm survival based on Danish firm-level data. We find strong evidence that firms experience a decline in market share prior to export market exit and prior to death and that the firms discontinuing their exporting activity or closing down tend to be small. Overall, our empirical results support the central predictions from the model. JEL: F12, F15, O33, L11, L16 Terms of use: Documents in

show abstract

Temporary trade and heterogeneous firms

Cited by 73 publications

References 31 publications

Survival in export markets

Survival in export markets

Managers' mobility, trade performance, and wages

Export Market Exit and Firm Survival: Theory and First Evidence

Contact Info

Product

Resources

About