TY - JOUR

T1 - Export entry and exit by German firms

AU - Bernard, Andrews B.

AU - Wagner, Joachim

PY - 2001

Y1 - 2001

N2 - Export Entry and Exit by German Firms. - While exports have played an important role in German business cycles, little is known about the export supply response of German firms. This paper presents a dynamic model of the export decision by a profit-maximizing firm. Using a panel of German manufacturing plants, we test for the role of plant characteristics and sunk costs in the entry decision. We find evidence for substantial sunk costs: exporting today by a plant increases the probability by 50 percent that the plant will export tomorrow. This advantage depreciates quickly, falling by two-thirds in a year. The authors also find evidence that plant success, as mea-sured by size and productivity, increases the likelihood of exporting.

AB - Export Entry and Exit by German Firms. - While exports have played an important role in German business cycles, little is known about the export supply response of German firms. This paper presents a dynamic model of the export decision by a profit-maximizing firm. Using a panel of German manufacturing plants, we test for the role of plant characteristics and sunk costs in the entry decision. We find evidence for substantial sunk costs: exporting today by a plant increases the probability by 50 percent that the plant will export tomorrow. This advantage depreciates quickly, falling by two-thirds in a year. The authors also find evidence that plant success, as mea-sured by size and productivity, increases the likelihood of exporting.

KW - Economics

KW - Deutschland

KW - Export

UR - http://www.scopus.com/inward/record.url?scp=0035609004&partnerID=8YFLogxK

U2 - 10.1007/BF02707602

DO - 10.1007/BF02707602

M3 - Journal articles

VL - 137

SP - 105

EP - 123

JO - Weltwirtschaftliches Archiv

JF - Weltwirtschaftliches Archiv

SN - 0043-2636

IS - 1

ER -