Export Experience, Product Differentiation and Firm Survival in Export Markets

15 Pages Posted: 5 May 2017

See all articles by Tomohiko Inui

Tomohiko Inui

Gakushuin University

Keiko Ito

Senshu University - School of Economics

Daisuke Miyakawa

Hitotsubashi University

Date Written: June 2017

Abstract

This paper examines the determinants of firm survival in export markets by explicitly taking into account the impact of firms’ previous export market experience and their product differentiation. Utilizing a 16‐year panel data set for Japanese manufacturing firms, we employ panel probit estimation to examine the likelihood of exit from export markets. The results of our estimations show, first, that the exit probability from export markets decreased over the export duration. Second, the probability of exiting from export markets tended to be lower when firms were more R&D intensive both prior to and after starting exporting. The first result implies that exporting experience plays an important role in firms’ survival in export markets. Our second result implies that firms producing differentiated products likely have a greater incentive to make upfront investments to start exporting, and these investments, in turn, enable such firms to survive in export markets for a longer period.

Suggested Citation

Inui, Tomohiko and Ito, Keiko and Miyakawa, Daisuke, Export Experience, Product Differentiation and Firm Survival in Export Markets (June 2017). The Japanese Economic Review, Vol. 68, Issue 2, pp. 217-231, 2017. Available at SSRN: https://ssrn.com/abstract=2962717 or http://dx.doi.org/10.1111/jere.12083

Tomohiko Inui (Contact Author)

Gakushuin University ( email )

1-5-1 Mejiro
Toshima-ku Tokyo 171-8588
United States

Keiko Ito

Senshu University - School of Economics ( email )

Kanagawa 214-8580
Japan

Daisuke Miyakawa

Hitotsubashi University ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

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