The Impact of Trade Costs on Firm Entry, Exporting, and Survival in Korea
13 Pages Posted: 21 Mar 2011
This study examines how changes in trade costs have affected entry, exit, productivity, and exporting in the Korean manufacturing sector. We verify several predictions of heterogeneous-firm models of international trade. For example, falling import-trade costs are associated with less entry and lower market shares among existing domestic firms, and higher total factor productivity for Korean manufacturing as a whole. The size of firms plays an important role in many of our results. New domestic firms are more likely to be small, but large firms are less likely to exit and more likely to have an increase in total factor productivity.
JEL Classification: F10, D24
Suggested Citation: Suggested Citation