EconPapers    
Economics at your fingertips  
 

Market entry costs, producer heterogeneity and export dynamics

Sanghamitra Das, Mark Roberts () and James Tybout

Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers from Indian Statistical Institute, New Delhi, India

Abstract: As the exchange rate, foreign demand, production costs and export promotion policies evolve, manufacturing firms are continually faced with two issues: 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 and estimate the model using plant-level panel data on Colombian chemical producers. The model embodies uncertainty, plant-level heterogeneity in export profits, and sunk entry costs for plants breaking into foreign markets. Our estimates, and the simulation exercises that they support, yield several implications. First, entry costs are typically large, but vary greatly across proucers. second, there is substantial cross-plant heterogeneity in gross expected export profit streams. Third, these large entry costs make expectations about future exporting conditions important for many producers, so changes in the exchange rate regime that are credible induce much more entry than those that are not. Fourth, however, most of the entry and exit takes place among marginal exporters who contribute little to aggregate export revenues. Finally, subsidies on export earnings have much large impact on export revenues(per dollar spent)than subsidies that reduce the entry costs faced by new exporters.

JEL-codes: F10 L10 (search for similar items in EconPapers)
Date: 2001-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31) Track citations by RSS feed

Downloads: (external link)
http://www.isid.ac.in/~pu/dispapers/dp03-10.pdf (application/pdf)

Related works:
Journal Article: Market Entry Costs, Producer Heterogeneity, and Export Dynamics (2007) Downloads
Working Paper: Market Entry Costs, Producer Heterogeneity, and Export Dynamics (2001) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ind:isipdp:03-10

Access Statistics for this paper

More papers in Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers from Indian Statistical Institute, New Delhi, India Contact information at EDIRC.
Bibliographic data for series maintained by Shamprasad M. Pujar ().

 
Page updated 2019-10-14
Handle: RePEc:ind:isipdp:03-10