SSE/EFI Working Paper Series in Economics and Finance
Do Foreign Contacts Enable Firms to Become Exporters?
Abstract: The pattern of trade between nations is well understood,
but much less is known about firm level determinants to export: why do some
firms start to export while others continue to produce for the domestic
market? One reason for different firm strategies could be that the fixed
costs for export differs between firms. This paper examines if foreign
contacts decrease export-costs and thereby have a positive impact on the
export propensity. More specifically, are establishments which have large
degrees of foreign contacts relatively likely to become exporters? Three
different types of foreign contacts are examined: foreign ownership,
import, and regional presence of Foreign Direct Investment. The study is
conducted using Indonesian establishment data covering all manufacturing
establishments with more than 20 employees.
Keywords: Export; sunk costs; foreign contacts; establishment data; Indonesia; (follow links to similar papers)
JEL-Codes: F10; F23; L10; (follow links to similar papers)
26 pages, June 22, 1999
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- This paper is published as:
Sjöholm, Fredrik, (2003), 'Which Indonesian Firms Exports? The Importance of Foreign Networks', Papers in Regional Science, Vol. 82, pages 333-350
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