 Marginal Distance: Does Export Experience Reduce Firm Trade Costs?Open Economies Review, 2013, vol. 24, issue 5, 819-841 Abstract: Are the costs of exporting to a market reduced if a firm has experience of exporting to a neighbouring market? If so, does this effect operate through reducing entry barriers or by increasing sales once the firm is operating in the market? This paper examines linkages between current export destinations and entry, sales and exit for new markets. We find that measures of exporting experience in geographically nearby markets increase the probability of entry into a market and reduce the probability of exit. However, these same measures have very limited effect on the firm’s export sales in the market. The effect of related experience on sales tends to be negative for recently entered firms. We interpret this result in the context of the Melitz heterogeneous-firm model of trade by showing that lower fixed costs reduce the entry threshold, but this lower threshold has the effect of allowing lower-sales marginal firms to be present in the market. Copyright Springer Science+Business Media New York 2013 Keywords: Distance; Export performance; Heterogeneous firms; F10 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:24:y:2013:i:5:p:819-841 Ordering information: This journal article can be ordered from DOI: 10.1007/s11079-013-9275-7 Access Statistics for this article Open Economies Review is currently edited by G.S. Tavlas More articles in Open Economies Review from Springer |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.