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CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology KTH/CESIS Working Paper Series in Economics and Institutions of Innovation

No 196:
Market Experiences and Export Decisions in Heterogeneous Firms

Sara Johansson ()

Abstract: This empirical analysis focus on the impact of firm characteristics, firmsí export experiences and location-specific variables on export decisions in Swedish manufacturing firms. Three choices of export market participation are considered: permanent export, occasional export and no export. The paper also analyzes firmsí choice of expanding export activities. The empirical results indicate that firm-level variables such as size, human capital intensity and labor productivity increases the probability of a firm being a permanent exporter rather than an occasional or non-exporter. Moreover, firms located in regions with a high concentration of other firms exporting commodities in the same product group have a higher probability of both permanent and occasional export market participation. The results also show a significant positive effect of firmsí export experiences in the previous period on the probability that a firm becomes a permanent exporter in the current period. The analysis of export market expansion suggest that firms with high human capital intensity and experiences from exporting several products to several markets are more likely to introduce a new export product. The probability of expanding to new geographical markets seems to be increasing with firm-level labor productivity and export experiences from multiple markets in previous periods.

Keywords: export behavior; firm heterogeneity; learning-by-exporting; experiential knowledge; knowledge spillover; agglomeration economies; (follow links to similar papers)

JEL-Codes: F14; (follow links to similar papers)

36 pages, September 28, 2009

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