Entry and Exit in International Markets: Evidence from Chilean Data
34 Pages Posted: 16 Feb 2005
Date Written: September 29, 2006
Several studies examine the patterns and determinants of entry and exit in manufacturing industries. Not much work exists on entry and exit in international markets. This paper uses Chilean data to analyze the determinants of entry and exit in and out of export markets. We find that entry and exit rates differ across industries; vary over time; and are positively correlated. The econometric analysis shows that within-industry heterogeneity, measured by differences in productivity or other firm characteristics, has a significant effect on plant turnover in international markets. Our findings reveal that trade costs, factor intensities, and fluctuations in the real exchange rate play a minor role explaining entry and exit. This last result is consistent with hysteresis in international markets.
Keywords: Entry, Exit, International Markets, Chile
JEL Classification: F14, D21, O54
Suggested Citation: Suggested Citation