Transport infraestructure, sunk costs and firms' export behaviour

Pedro Albarran ()
Authors registered in the RePEc Author Service: Raquel Carrasco () and Adelheid Holl

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets.

Keywords: Accessibility; Dynamic; panel; data; Export; decision; Transport; infrastructure (search for similar items in EconPapers)
JEL-codes: F14 R1 R4 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-int and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we092213

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