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Impact of political instability on firm-level export decisions

Kul Kapri

International Review of Economics & Finance, 2019, vol. 59, issue C, 98-105

Abstract: In this paper, I use South Asian firm-level data to examine the effect of political instability on firm-level decisions to enter the foreign market. This is the first micro-level study in the international trade literature to examine the relationship between political instability and the firm-level export decision. This study uses the IV probit model to analyze the repeated cross-sectional data collected by the World Bank. I estimate various specifications to show that political instability is closely related to firm-level decisions to enter the market. The results confirm that political instability increases the probability that a firm enters the foreign market.

Keywords: Exports; Global firm; Political instability; Firm heterogeneity; World bank (search for similar items in EconPapers)
JEL-codes: F10 F14 O1 K42 L2 (search for similar items in EconPapers)
Date: 2019
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