Survival in export markets

Autores
Albornoz, Facundo; Fanelli, Sebastián; Hallak, Juan Carlos
Año de publicación
2016
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
This paper explores the determinants of firm survival in export markets. We build an exporter dynamics model where firms need to pay market-specific sunk and fixed costs to operate abroad and where firm export profitability in each foreign market follows a geometric Brownian motion. Firms also differ ex ante by a constant market-specific profitability shifter. We derive the probability of export survival upon entry in a market and show that it increases with the ratio of sunk to fixed costs and is insensitive to the profitability shifters. Also, we show that the survival probability is unaffected by fixed costs if sunk costs are zero. We take the model to the data using firm-level Argentine export information. We find that survival rates decrease with distance, which the model rationalizes with sunk costs that increase with distance proportionally less than fixed costs. Estimated sunk costs are small. In fact, a counterfactual exercise shows that removing those costs increases aggregate exports by less than 1.5%. Finally, we also find that survival increases with a firm's export experience. Analogously to distance, the model's implication of this empirical result is that experience reduces sunk costs proportionally less than fixed costs.
Fil: Albornoz, Facundo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. University of Nottingham; Estados Unidos
Fil: Fanelli, Sebastián. Massachusetts Institute of Technology; Estados Unidos
Fil: Hallak, Juan Carlos. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad de San Andrés; Argentina. Ministerio de Industria; Argentina
Materia
EXPORT DYNAMICS
FIRM HETEROGENEITY
FIXED AND SUNK COSTS
GEOMETRIC BROWNIAN MOTION
PRODUCTIVITY
SURVIVAL
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/115722

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network_name_str CONICET Digital (CONICET)
spelling Survival in export marketsAlbornoz, FacundoFanelli, SebastiánHallak, Juan CarlosEXPORT DYNAMICSFIRM HETEROGENEITYFIXED AND SUNK COSTSGEOMETRIC BROWNIAN MOTIONPRODUCTIVITYSURVIVALhttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5This paper explores the determinants of firm survival in export markets. We build an exporter dynamics model where firms need to pay market-specific sunk and fixed costs to operate abroad and where firm export profitability in each foreign market follows a geometric Brownian motion. Firms also differ ex ante by a constant market-specific profitability shifter. We derive the probability of export survival upon entry in a market and show that it increases with the ratio of sunk to fixed costs and is insensitive to the profitability shifters. Also, we show that the survival probability is unaffected by fixed costs if sunk costs are zero. We take the model to the data using firm-level Argentine export information. We find that survival rates decrease with distance, which the model rationalizes with sunk costs that increase with distance proportionally less than fixed costs. Estimated sunk costs are small. In fact, a counterfactual exercise shows that removing those costs increases aggregate exports by less than 1.5%. Finally, we also find that survival increases with a firm's export experience. Analogously to distance, the model's implication of this empirical result is that experience reduces sunk costs proportionally less than fixed costs.Fil: Albornoz, Facundo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. University of Nottingham; Estados UnidosFil: Fanelli, Sebastián. Massachusetts Institute of Technology; Estados UnidosFil: Hallak, Juan Carlos. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad de San Andrés; Argentina. Ministerio de Industria; ArgentinaElsevier2016-09info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/115722Albornoz, Facundo; Fanelli, Sebastián; Hallak, Juan Carlos; Survival in export markets; Elsevier; Journal of International Economics; 102; 9-2016; 262-2811873-03530022-1996CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/https://linkinghub.elsevier.com/retrieve/pii/S0022199616300666info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jinteco.2016.05.003info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-29T09:33:18Zoai:ri.conicet.gov.ar:11336/115722instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-29 09:33:18.885CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Survival in export markets
title Survival in export markets
spellingShingle Survival in export markets
Albornoz, Facundo
EXPORT DYNAMICS
FIRM HETEROGENEITY
FIXED AND SUNK COSTS
GEOMETRIC BROWNIAN MOTION
PRODUCTIVITY
SURVIVAL
title_short Survival in export markets
title_full Survival in export markets
title_fullStr Survival in export markets
title_full_unstemmed Survival in export markets
title_sort Survival in export markets
dc.creator.none.fl_str_mv Albornoz, Facundo
Fanelli, Sebastián
Hallak, Juan Carlos
author Albornoz, Facundo
author_facet Albornoz, Facundo
Fanelli, Sebastián
Hallak, Juan Carlos
author_role author
author2 Fanelli, Sebastián
Hallak, Juan Carlos
author2_role author
author
dc.subject.none.fl_str_mv EXPORT DYNAMICS
FIRM HETEROGENEITY
FIXED AND SUNK COSTS
GEOMETRIC BROWNIAN MOTION
PRODUCTIVITY
SURVIVAL
topic EXPORT DYNAMICS
FIRM HETEROGENEITY
FIXED AND SUNK COSTS
GEOMETRIC BROWNIAN MOTION
PRODUCTIVITY
SURVIVAL
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv This paper explores the determinants of firm survival in export markets. We build an exporter dynamics model where firms need to pay market-specific sunk and fixed costs to operate abroad and where firm export profitability in each foreign market follows a geometric Brownian motion. Firms also differ ex ante by a constant market-specific profitability shifter. We derive the probability of export survival upon entry in a market and show that it increases with the ratio of sunk to fixed costs and is insensitive to the profitability shifters. Also, we show that the survival probability is unaffected by fixed costs if sunk costs are zero. We take the model to the data using firm-level Argentine export information. We find that survival rates decrease with distance, which the model rationalizes with sunk costs that increase with distance proportionally less than fixed costs. Estimated sunk costs are small. In fact, a counterfactual exercise shows that removing those costs increases aggregate exports by less than 1.5%. Finally, we also find that survival increases with a firm's export experience. Analogously to distance, the model's implication of this empirical result is that experience reduces sunk costs proportionally less than fixed costs.
Fil: Albornoz, Facundo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. University of Nottingham; Estados Unidos
Fil: Fanelli, Sebastián. Massachusetts Institute of Technology; Estados Unidos
Fil: Hallak, Juan Carlos. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad de San Andrés; Argentina. Ministerio de Industria; Argentina
description This paper explores the determinants of firm survival in export markets. We build an exporter dynamics model where firms need to pay market-specific sunk and fixed costs to operate abroad and where firm export profitability in each foreign market follows a geometric Brownian motion. Firms also differ ex ante by a constant market-specific profitability shifter. We derive the probability of export survival upon entry in a market and show that it increases with the ratio of sunk to fixed costs and is insensitive to the profitability shifters. Also, we show that the survival probability is unaffected by fixed costs if sunk costs are zero. We take the model to the data using firm-level Argentine export information. We find that survival rates decrease with distance, which the model rationalizes with sunk costs that increase with distance proportionally less than fixed costs. Estimated sunk costs are small. In fact, a counterfactual exercise shows that removing those costs increases aggregate exports by less than 1.5%. Finally, we also find that survival increases with a firm's export experience. Analogously to distance, the model's implication of this empirical result is that experience reduces sunk costs proportionally less than fixed costs.
publishDate 2016
dc.date.none.fl_str_mv 2016-09
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/115722
Albornoz, Facundo; Fanelli, Sebastián; Hallak, Juan Carlos; Survival in export markets; Elsevier; Journal of International Economics; 102; 9-2016; 262-281
1873-0353
0022-1996
CONICET Digital
CONICET
url http://hdl.handle.net/11336/115722
identifier_str_mv Albornoz, Facundo; Fanelli, Sebastián; Hallak, Juan Carlos; Survival in export markets; Elsevier; Journal of International Economics; 102; 9-2016; 262-281
1873-0353
0022-1996
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/https://linkinghub.elsevier.com/retrieve/pii/S0022199616300666
info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jinteco.2016.05.003
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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