Transport infraestructure, sunk costs and firms' export behaviour

Transport infrastructure investment reduces the cost of distance and enables firms to establish contacts over larger distances. We study the impact of transport-cost reductions on firms’ export behaviour, accounting for the role of entry costs and other firms’ characteristics. Using Spanish data we estimate dynamic probability models controlling for firms’ unobserved heterogeneity and for the simultaneity of firms’ export and location decisions. Our results provide support for a positive effect of domestic transport improvements on firms’ exporting probability for small and medium sized firms. We find a strong effect of previous export experience, suggesting high entry costs into export markets.

[1]  M. Crozet,et al.  Structural Gravity Equations with Intensive and Extensive Margins , 2010 .

[2]  Thomas Chaney,et al.  Distorted Gravity: The Intensive and Extensive Margins of International Trade , 2008 .

[3]  David Greenaway,et al.  Firm Heterogeneity, Exporting and Foreign Direct Investment , 2007 .

[4]  Sascha O. Becker,et al.  Endogenous product versus process innovation and a firm’s propensity to export , 2007 .

[5]  E. Strobl,et al.  Grant Support and Exporting Activity , 2007, The Review of Economics and Statistics.

[6]  J. Francois,et al.  Institutions, Infrastructure and Trade , 2007 .

[7]  J Wagner,et al.  Exports and Productivity: A Survey of the Evidence from Firm Level Data , 2005 .

[8]  Peter K. Schott,et al.  Firms in International Trade , 2006 .

[9]  Peter K. Schott,et al.  Trade costs, firms and productivity , 2006 .

[10]  P. Combes,et al.  Transport costs: measures, determinants, and regional policy implications for France , 2005 .

[11]  D. Greenaway,et al.  Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms , 2004 .

[12]  K. Head,et al.  The Puzzling Persistence of the Distance Effect on Bilateral Trade , 2004, The Review of Economics and Statistics.

[13]  Rosella Nicolini.  On the Determinants of Regional Trade Flows , 2003 .

[14]  A. Venables,et al.  Geography and Export Performance: External Market Access and Internal Supply Capacity , 2003 .

[15]  Jeffrey M. Wooldridge,et al.  The Initial Conditions Problem in Dynamic, Nonlinear Panel Data Models with Unobserved Heterogeneity , 2002 .

[16]  Roberto Basile,et al.  Export behaviour of Italian manufacturing firms over the nineties: the role of innovation , 2001 .

[17]  A. Venables,et al.  Infrastructure, Geographical Disadvantage, Transport Costs, and Trade , 2001 .

[18]  A. Bernard,et al.  Why Some Firms Export , 2001, Review of Economics and Statistics.

[19]  A. Venables,et al.  Infrastructure, Geographical Disadvantage, and Transport Costs , 1999 .

[20]  Mark J. Roberts,et al.  An Empirical Model of Sunk Costs and the Decision to Export , 1999 .

[21]  Alessandro Sterlacchini,et al.  Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performance , 1999 .

[22]  Elisabet Viladecans-Marsal,et al.  The District Effect and the Competitiveness of Manufacturing Companies in Local Productive Systems , 1999 .

[23]  Panicos O. Demetriades,et al.  Infrastructure, transport costs and trade , 1999 .

[24]  David Hummels,et al.  Toward a Geography of Trade Costs , 1999, GTAP Working Paper.

[25]  A. Bernard,et al.  Exceptional Exporter Performance: Cause, Effect, or Both? , 1997 .

[26]  P. Braunerhjelm.  The Relation between Firm–Specific Intangibles and Exports , 1996 .

[27]  B. Aw,et al.  Productivity and the export market: A firm-level analysis , 1995 .

[28]  M. Arellano,et al.  Another look at the instrumental variable estimation of error-components models , 1995 .

[29]  J Wagner,et al.  Exports, firm size, and firm dynamics , 1995 .

[30]  Gordon H. Hanson,et al.  Spillovers, Foreign Investment, and Export Behavior , 1994 .

[31]  Gary Chamberlain,et al.  Analysis of Covariance with Qualitative Data , 1979 .

[32]  J. García,et al.  Diez años de encuesta sobre estrategias empresariales , 1999 .

[33]  Andrew B. Bernard,et al.  Exporters, Jobs, and Wages in U.S. Manufacturing: 1976-1987 , 1995 .

[34]  James J. Heckman,et al.  Identifying the Hand of the Past: Distinguishing State Dependence from Heterogeneity , 1991 .

[35]  Cheng Hsiao,et al.  Formulation and estimation of dynamic models using panel data , 1982 .