Why Some Firms Export

33 Pages Posted: 18 Nov 1998

See all articles by Andrew B. Bernard

Andrew B. Bernard

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

J. Bradford Jensen

Georgetown University - McDonough School of Business; Peterson Institute for International Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2001

Abstract

Traditional trade models focus on aggregate and industry flows and usually ignore firm level factors. This paper presents a dynamic model of the export decision by a profit-maximizing firm. Using a panel of U.S. manufacturing plants, we test for the role of plant characteristics, spillovers from neighboring exporters, entry costs and government expenditures. Entry and exit in the export market by U.S. plants is substantial, past exporters are apt to reenter, and plants are likely to export in consecutive years. However, we find that entry costs, although present, are modest and spillovers from other plants negligible. Plan characteristics, especially those indicative of past success, strongly increase the probability of exporting as do favorable exchange rate shocks.

Keywords: exporting, hysteresis, export promotion, panel data, unobserved heterogeneity, dynamic binary choice

JEL Classification: F20, D21, L60

Suggested Citation

Bernard, Andrew B. and Jensen, J. Bradford, Why Some Firms Export (April 2001). MIT Dept. of Economics Working Paper No. 97-26, Available at SSRN: https://ssrn.com/abstract=140074 or http://dx.doi.org/10.2139/ssrn.140074

Andrew B. Bernard (Contact Author)

Dartmouth College - Tuck School of Business ( email )

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HOME PAGE: http://mba.tuck.dartmouth.edu/pages/faculty/Andrew.Bernard/

National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR) ( email )

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J. Bradford Jensen

Georgetown University - McDonough School of Business ( email )

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Peterson Institute for International Economics ( email )

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Washington, DC 20036
United States

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