Import-based market experience and firms’ exit from export markets

Choquette, Eliane

doi:10.1057/s41267-018-0193-1

Cited by 34 publications

(33 citation statements)

References 48 publications

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“…However, Besedes and Prusa (2011) found that the median survival rate of the manufacturing exporters of 46 developed and developing countries is only 1-2 years. This short-lived export episode has been found in other studies as well; Eaton et al (2007) for Colombian exporters; Volpe and Carballo (2009) for Peruvian exporters; Ilmakunnas and Nurmi (2010) for Finnish exporters; and, Choquette (2019) for Danish exporters. Nguyen (2012) shows in numerical prediction that more than 30 percent of exporting firms fail.…”

Section: Introductionsupporting

confidence: 81%

“…On the other hand, however, firms with better market information faces lower sunk cost entering and exiting new markets. In this view, the knowledge gained from import experience may reduce the export entry sunk cost in which may induce the firms to experiment with their export entries that ultimately may lead to higher exit probabilities, (Gullstrand and Persson, 2015;Li et al, 2017;Choquette, 2019).…”

Section: Introductionmentioning

confidence: 99%

“…Lo Turco and Maggioni (2013) show that for Italian manufacturing firms, import has enhancing effect on the export probability but only if the import is from low-income countries. Choquette (2019) study the relationship between import-based market experience and market exit decision of 1920 Danish manufacturing exporters between the period 2001 and 2011. In line with sunk cost perspective, she finds that increased market knowledge triggers experimentation-like export behavior, which consequently leads to higher probability of market exit.…”

Section: Introductionmentioning

confidence: 99%

“…In line with sunk cost perspective, she finds that increased market knowledge triggers experimentation-like export behavior, which consequently leads to higher probability of market exit. However, in Choquette (2019), firms exit decision from a specific market do not necessary mean export failure but rather a transition from one market the firms have entered as experiment due to low entry sunk cost to another more sustainable market.…”

Section: Introductionmentioning

confidence: 99%

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Global sourcing, firm size and export survival

Bandick

2020

Economics

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This paper investigates how firm size and global sourcing affect the export surviving probabilities. By using data on export and import transactions disaggregated by destination/origin for the entire Danish manufacturing firms between the period 1995-2006, the author is able to classify the firms into different size categories and to observe whether they continue or cease to export. Moreover, he is able to define whether the firms source intermediate inputs from high-or low-wage counties. The results, after controlling for the endogeneity of the international sourcing decision by using instrument variable and propensity score matching, indicate that firm size is positively correlated with the likelihood of continuing to export. Moreover, for small and medium size firms, global sourcing seems also to increase the probability of staying in the export market but only if they source from high-wage countries. However, sourcing inputs from abroad, no matter if it is from high-or low-wage countries, do not seem to significantly affect the export surviving probabilities for larger firms.

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Section: Introductionsupporting

confidence: 81%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Global sourcing, firm size and export survival

Bandick

2020

Economics

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“…Sin distinguir el tipo de actividad que realiza la nueva empresa o los años de experiencia exportadora de las empresas locales, los dos trabajos encuentran que la aglomeración de empresas con una misma actividad de exportación tiene un impacto positivo, pero muy pequeño (y a veces nulo), sobre la duración de las relaciones de exportación a nivel de empresa-destino (2000-2010) y de empresa-producto-destino (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015). Hay dos posibles explicaciones (Ahn et al, 2011;Choquette, 2019). La primera es que el aprendizaje basado en una experiencia exportadora previa reduce significativamente el papel de los SE en la probabilidad de supervivencia de las relaciones de exportación.…”

Section: Introductionunclassified

Spillovers de exportación y supervivencia exportadora en España

Esteve‐Pérez

Fernández

Fuentes

et al. 2020

CICE

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Utilizando datos de empresas manufactureras exportadoras españolas, este trabajo investiga si la presencia de empresas que exportan de forma regular un producto a un país ayuda a otras empresas en la misma provincia que empiezan a exportar a mantener relaciones de exportación más duraderas. Nuestros resultados muestran que: (i) la tasa de supervivencia de las nuevas empresas exportadoras es mayor en las relaciones de exportación definidas a nivel de provincia-producto-destino cuando hay presencia de al menos un exportador regular en la misma provincia; (ii) cuando hay más de 10 exportadores regulares en la misma provincia, el impacto positivo se incrementa significativamente; y, (iii) el efecto positivo de la concentración de exportadores regulares es específico al nivel provincia-producto-destino puesto que el impacto es menor o no existe a nivel provincia-producto, provincia-industria o provincia-destino.

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Does prior success influence risk‐taking in foreign location decisions? A prospect theory perspective

Schwaiger,

Hennrich,

Fisch

2024

Global Strategy Journal

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Research SummaryResearch suggests that foreign direct investment decisions can be biased and deviate from economic theory. This study deploys prospect theory to analyze the impact of the success of previous investments on risk‐taking in subsequent investment decisions. Our theorizing suggests that prior success influences foreign investors' decisions to take host‐country risk, and that this moderating influence on the risk‐investment relation is specific to the type of risk. The results of an event‐history study of 1259 location decisions support the notion that the success of previous investments encourages investors to enter host countries with high negative or positive risk, whereas it discourages them from entering locations with high mixed risk. The effects are stronger for investment locations that are similar than for those that are dissimilar.Managerial SummaryRegarding the varying risks that investors face in foreign countries, investment decisions may sometimes appear rather confident and sometimes rather cautious. Our study relates these decisions to the success that investors had with similar investments in the past, since research suggests that experiencing gains or losses can influence decision behavior. The results suggest that prior success affects risk‐taking in foreign direct investment decisions and comes in contrary forms, depending on the type of risk: prior success leads to overconfident investment decisions in the case of negative and positive risk, whereas it induces overcautious investment decisions in the case of mixed risk. Being aware of these behavioral tendencies can prevent managers from making biased investment decisions.

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Import-based market experience and firms’ exit from export markets

Cited by 34 publications

References 48 publications

Global sourcing, firm size and export survival

Global sourcing, firm size and export survival

Spillovers de exportación y supervivencia exportadora en España

Does prior success influence risk‐taking in foreign location decisions? A prospect theory perspective

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