Why Some Firms Export

33 Pages Posted: 21 Jul 2001 Last revised: 26 Oct 2022

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

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Date Written: July 2001

Abstract

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 export promotion 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 are significant and spillovers from the export activity of other plants negligible. State export promotion expenditures have no significant effect on the probability of exporting. Plant characteristics, especially those indicative of past success, strongly increase the probability of exporting as do favorable exchange rate shocks.

Suggested Citation

Bernard, Andrew B. and Jensen, J. Bradford, Why Some Firms Export (July 2001). NBER Working Paper No. w8349, Available at SSRN: https://ssrn.com/abstract=275423

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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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