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Entry Costs and Increasing Trade

Author

Listed:
  • Lincoln, William F.

    (University of Michigan)

  • McCallum, Andrew H.

    (University of Michigan)

Abstract

Using confidential microdata from the US Census, we find that the fraction of manufacturing plants that export rose from 21% in 1987 to 39% in 2006. It has been suggested that similar trends in other countries may have been caused by declining costs of entering foreign markets. Our study tests this hypothesis for the first time. Both reduced form and structural estimation approaches find little evidence that the entry costs declined significantly in the US over this period. We instead argue that changes in other factors that determine export status are sufficient to explain these trends.

Suggested Citation

  • Lincoln, William F. & McCallum, Andrew H., 2011. "Entry Costs and Increasing Trade," Working Papers 619, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:619
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    File URL: http://www.fordschool.umich.edu/rsie/workingpapers/Papers601-625/r619.pdf
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    References listed on IDEAS

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    Cited by:

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    2. William R. Kerr & William F. Lincoln & Prachi Mishra, 2014. "The Dynamics of Firm Lobbying," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 343-379, November.
    3. Ryan Monarch, 2014. ""It's Not You, It's Me": Breakup In U.S.-China Trade Relationships," Working Papers 14-08, Center for Economic Studies, U.S. Census Bureau.
    4. Artuc,Erhan & Iootty De Paiva Dias,Mariana & Pirlea,Ana Florina & Artuc,Erhan & Iootty De Paiva Dias,Mariana & Pirlea,Ana Florina, 2014. "Export performance and geography in Croatia," Policy Research Working Paper Series 6999, The World Bank.

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    More about this item

    Keywords

    entry costs; extensive margin;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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