Does the Past Performance in Home Market Affect Export Participation of New Exporters? Evidence from Indian Firms

Priyanta Ghosh and Aparna Sawhney

Chapter Chapter 2 in Trade, Investment and Economic Growth, 2021, pp 23-36 from Springer

Abstract: Abstract This paper analyses the role of a firm’s home market performance in its export entry decision for Indian manufacturing firms during the period 2000–2014. Classifying firms under three broad categories of new exporters, incumbent exporters and non-exporters, we show that new exporters, as well as incumbent exporters, are bigger and more productive compared to non-exporters. Comparing between exporters, we find that new exporters are bigger than incumbent exporters, but not different in terms of factor productivity. Using longitudinal micro-level data, we estimate a random effect probit model to test for the significance of the home market performance on firm export behaviour for new exporters vis-à-vis non-exporters. We find that home market performance enhances export behaviour, and firms with higher growth rate in the home market are more likely to enter the export market in future.

Keywords: Home market; Export participation; New exporters; Incumbent exporters; Probit model; C33; C35; F14 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-33-6973-3_2

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DOI: 10.1007/978-981-33-6973-3_2

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