Market Entry Costs, Producer Heterogeneity, and Export Dynamics
Mark Roberts () and
Econometrica, 2007, vol. 75, issue 3, 837-873
As the exchange rate, foreign demand, and production costs evolve, domestic producers are continually faced with two choices: whether to be an exporter and, if so, how much to export. We develop a dynamic structural model of export supply that characterizes these two decisions. The model embodies plant-level heterogeneity in export profits, uncertainty about the determinants of future profits, and market entry costs for new exporters. Using a Bayesian Monte Carlo Markov chain estimator, we fit this model to plant-level panel data on three Colombian manufacturing industries. We obtain profit function and sunk entry cost coefficients, and use them to simulate export responses to shifts in the exchange-rate process and several types of export subsidies. In each case, the aggregate export response depends on entry costs, expectations about the exchange rate process, prior exporting experience, and producer heterogeneity. Export revenue subsidies are far more effective at stimulating exports than policies that subsidize entry costs. Copyright The Econometric Society 2007.
References: Add references at CitEc
Citations: View citations in EconPapers (344) Track citations by RSS feed
Downloads: (external link)
http://hdl.handle.net/10.1111/j.1468-0262.2007.00769.x link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Market entry costs, producer heterogeneity and export dynamics (2001)
Working Paper: Market Entry Costs, Producer Heterogeneity, and Export Dynamics (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:75:y:2007:i:3:p:837-873
Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues
Access Statistics for this article
Econometrica is currently edited by Daron Acemoglu
More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing ().