The Internationalization Process of Firms: From Exports to FDI?

Conconi, Paola; Sapir, André; Zanardi, Maurizio

doi:10.2139/ssrn.1692585

Cited by 60 publications

(19 citation statements)

References 167 publications

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“…trade and investment) are more likely to benefit trade and FDI (both at the extensive and intensive margin) than agreements focusing on single-issue liberalization. This supports the idea that trade and FDI are complements, for example, due to the global fragmentation of production (Head and Ries, 2004) or to information spillovers (within and between) firms serving foreign markets via exports or FDI (Conconi et al, 2012).…”

Section: Paola Conconisupporting

confidence: 76%

Multiple faces of preferential market access: their causes and consequences

Egger

Wamser

2013

Econ Policy

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SUMMARYThis paper suggests an integrated approach to study selection into and consequences of five modes of preferential economic integration agreements (PEIAs): goods trade agreements (GTAs), services trade agreements (STAs), double taxation treaties (DTTs), bilateral investment treaties (BITs), and currency unions as well as currency pegs (CUAs). A detailed descriptive analysis reveals typical integration patterns, with DTTs and BITs often being first steps towards deeper integration. We consider the effects of PEIAs on bilateral goods trade, services trade, and FDI and provide conclusive evidence that single and combined PEIAs are associated with positive effects not only on single outcome but typically on all outcomes. Investment liberalization through DTTs and BITs seems to be particularly beneficial since concluding them alone or in any combination with other agreements encourages goods trade even more than the liberalization of goods trade per se.--Peter Egger and Georg Wamser P r e f e r e n t i a l m a r k e t a c c e s s Economic Policy

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Section: Paola Conconisupporting

confidence: 76%

Multiple faces of preferential market access: their causes and consequences

Egger

Wamser

2013

Econ Policy

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“…This is the approach followed by Conconi et al (2010) in recent work, where they modify our framework to study whether exporting to a market serves as a testing ground for a firm's (potential) future foreign direct investment in that market. 26 Three recent papers provide some initial steps in this direction.…”

Section: Resultsmentioning

confidence: 99%

Sequential exporting

Albornoz¹,

Calvo‐Pardo²,

Corcos³

et al. 2012

Journal of International Economics

372

340

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Many new exporters give up exporting very shortly, despite substantial entry costs; others shoot up foreign sales and expand to new destinations. We develop a model based on experimentation to rationalize these and other dynamic patterns of exporting firms. We posit that individual export profitability, while initially uncertain, is positively correlated over time and across destinations. This leads to "sequential exporting," where the possibility of profitable expansion at the intensive and extensive margins makes initial entry costs worthwhile despite high failure rates. Firm-level evidence from Argentina's customs, which would be difficult to reconcile with existing models, strongly supports this mechanism. Sequential exporting also has important and novel policy implications: a reduction in trade barriers has delayed effects, while also promoting entry in third markets. This trade externality poses challenges for the quantification of the effects of trade liberalization programs and implies that the consequences of international trade agreements are significantly richer than traditional models suggest. JEL Codes: F10; D21; F13 Keywords: Export dynamics, experimentation, uncertainty, learning, trade liberalization * We thank Costas Arkolakis, David Atkin, Sami Berlinski, Jordi Blanes-i-Vidal, John Bluedorn, Holger Breinlich, Svetlana Demidova, Nic de Roos, Peter Egger, Robert Elliott, Daniel Ferreira, Rodrigo Fuentes, Martin Gervais, Juan Carlos Hallak, James Harrigan, Beata Javorcik, Marc-Andreas Muendler, Peter Neary, Brent Neiman, Dimitra Petropoulou, Horst Raff, Steve Redding, Frédéric Robert-Nicoud, Mark Roberts, Ina Simonovska, Thierry Verdier, Zhihong Yu, and seminar participants at various institutions and conferences for valuable comments and suggestions. We also thank the support of the Chair Jacquemin of the Université Catholique de Louvain in choosing this paper for its annual award at the 2009 European Trade Study Group Meeting. We gratefully acknowledge financial support from the British Academy and the ESRC.

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“…6 See Conconi et al (2012) for a similar definition. 7 This growth rate has become standard in the analysis of firm and labor market dynamics.…”

Section: Growth Rate Of Firm Level Exportsmentioning

confidence: 99%

Firms' Export Dynamics: Experience vs. Size

Berthou

Vicard

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis paper provides evidence about the impact that size and experience in exporting have on firms' dynamics, a critical input in models of firms dynamics. The analysis uses a census of French exports by firm-destination-product over the period 1994-2008 with a monthly frequency. We first uncover a large calendar year bias: the growth of exporters between the first and the second year of export is biased upwards because new exporters may start exporting late during the year. This incomplete calendar year reduces export revenue by 32% on average for the first year of export. We then show that, controlling for size, export experience is negatively related to net growth of exports for surviving exporters. Controlling for export experience, the relationship between average size and net growth of exports shows no systematic pattern. Finally, churning in foreign markets is decreasing with export experience and (sharply) with size.JEL classification: F14. Keywords: International trade, Firms' heterogeneity, Firms' dynamics, Churning.1 Non-technical summaryThis paper focuses on the sources of firms' performance in international markets. More precisely, it provides evidence about the role of exporters' size and experience for firms' growth, which are key variables in models of firms' dynamics. We investigate how these two variables affect the growth of exports, i.e. are young (small) exporters growing more rapidly than experienced (large) ones in international markets? As both experience and size are imperfectly correlated, i.e. small exporters may be new exporters or exporters about to stop exporting, they reveal different information that can affect the dynamics of firms in international markets. We therefore consider them jointly in our estimations.Existing international trade models have emphasized the importance of firm heterogeneity in explaining the cross-sectional distribution of firm size in domestic and foreign markets. Sales and exports are extremely concentrated among a limited number of very large firms, whereas a large number of small exporters ship one product to a single destination. This size distribution of exporters is influenced by the process of entry and exit, as new exporters tend to be small, grow fast but have a low rate of survival. Understanding the relative contribution of experience and size in firms' performance is central to the explanation and modeling of firms' dynamics in domestic or...

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The Internationalization Process of Firms: From Exports to FDI?

Cited by 60 publications

References 167 publications

Multiple faces of preferential market access: their causes and consequences

Multiple faces of preferential market access: their causes and consequences

Sequential exporting

Firms' Export Dynamics: Experience vs. Size

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