Sunk costs of exporting and the role of experience in international trade

In: The Canadian journal of economics: the journal of the Canadian Economics Association = Revue canadienne d'économique, Band 48, Heft 1, S. 335-367

Abstract

AbstractThis paper estimates the importance of destination‐specific sunk costs of exporting and investigates the role of firms' previous experience in international trade for the decision to export to a market. While destination‐specific sunk costs are important, firms' experience in international trade can help to overcome these costs more easily. In particular, import experience from a market is found to facilitate exporting to this country and export experience from other markets can increase the probability of exporting to a country. This latter effect turns out to be conditional on the characteristics and number of markets served by a firm.