True versus spurious state dependence in firm performance: The case of German exports
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True versus spurious state dependence in firm performance : The case of German exports. / Kaiser, Ulrich; Kongsted, Hans Christian.
I: Empirical Economics, Bind 35, Nr. 2, 2008, s. 207-228.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - True versus spurious state dependence in firm performance
T2 - The case of German exports
AU - Kaiser, Ulrich
AU - Kongsted, Hans Christian
N1 - JEL Classification: C23, D21
PY - 2008
Y1 - 2008
N2 - This paper analyzes the persistence of firms' exporting behavior in a panel of German manufacturing firms using dynamic binary choice models. We distinguish between true and spurious state dependence in exports and apply fixed effects methods that allow us to verify the robustness of our results to critical assumptions on firms' initial export status. We find robust evidence of state dependence in the current export status of firms. We also document an important role of unobserved permanent firm heterogeneity (spurious state dependence) and quantify the relative importance of different export determinants. Our results, which are consistent with the findings of previous studies on firms in developing countries and in the United States, show the presence of important sunk costs in export market entry and a depreciation of knowledge and experience in export markets.
AB - This paper analyzes the persistence of firms' exporting behavior in a panel of German manufacturing firms using dynamic binary choice models. We distinguish between true and spurious state dependence in exports and apply fixed effects methods that allow us to verify the robustness of our results to critical assumptions on firms' initial export status. We find robust evidence of state dependence in the current export status of firms. We also document an important role of unobserved permanent firm heterogeneity (spurious state dependence) and quantify the relative importance of different export determinants. Our results, which are consistent with the findings of previous studies on firms in developing countries and in the United States, show the presence of important sunk costs in export market entry and a depreciation of knowledge and experience in export markets.
KW - Faculty of Social Sciences
KW - export activity
KW - dynamic binary choice models
KW - fixed effects
U2 - 10.1007/s00181-007-0149-y
DO - 10.1007/s00181-007-0149-y
M3 - Journal article
VL - 35
SP - 207
EP - 228
JO - Empirical Economics
JF - Empirical Economics
SN - 0377-7332
IS - 2
ER -
ID: 5942357