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Using Stepping Stones to Enter Distant Export Markets

Author

Listed:
  • Lejour Arjan

    (CPB Netherlands Bureau for Economic Policy Analysis, PO Box 80153, 2508 GM The Hague, The Netherlands)

  • Creusen Harold

    (National Health Care Institute (Zorginstituut Nederland), Diemen, The Netherlands)

Abstract

This paper analyses firms’ export entry decisions and their subsequent expansion to other export markets using Dutch firm-level international transaction data. In particular new exporters increase quickly the distance between their export markets and their home country. They are also going to export to countries in which the institutional and regulatory quality is lower. We show that firms follow a stepping stone approach for learning to export and to enter distant markets. The probability to enter a market at 1,000 km from the Netherlands increases by about 25% if the firm already exports to a market at 500 km from the new one.

Suggested Citation

  • Lejour Arjan & Creusen Harold, 2015. "Using Stepping Stones to Enter Distant Export Markets," Global Economy Journal, De Gruyter, vol. 15(1), pages 107-132, March.
    • Handle: RePEc:bpj:glecon:v:15:y:2015:i:1:p:107-132:n:5
    DOI: 10.1515/gej-2014-0040
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    References listed on IDEAS

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    Cited by:

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    2. Łukasz Matuszczak, 2019. "What are the determinants of international trade in services? Evidence from firm-level data for Poland," Working Papers 2019-20, Faculty of Economic Sciences, University of Warsaw.
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    More about this item

    Keywords

    strategic export decisions; sequential export market entry; heterogeneous firms;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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