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Do Foreign Contacts Enable Firms to Become Exporters?

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  • Sjöholm, Fredrik

    (The European Institute of Japanese Studies)

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.

Suggested Citation

  • Sjöholm, Fredrik, 1999. "Do Foreign Contacts Enable Firms to Become Exporters?," SSE/EFI Working Paper Series in Economics and Finance 326, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0326
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    References listed on IDEAS

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    Cited by:

    1. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(4), pages 605-628, December.
    2. Ilias A. Makris & Vasilis Nikolaidis & Stavros Stavroyiannis, 2016. "Economic Growth and Exporting Activity: An Empirical Analysis on Greek Industry," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 41-52.

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    More about this item

    Keywords

    Export; sunk costs; foreign contacts; establishment data; Indonesia;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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