True Versus Spurious State Dependence in Firm Performance: The Case of German Exports
Research output: Working paper › Research
Standard
True Versus Spurious State Dependence in Firm Performance : The Case of German Exports. / Kaiser, Ulrich; Kongsted, Hans Christian.
Centre for Industrial Economics, Department of Economics, University of Copenhagen, 2007.Research output: Working paper › Research
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - UNPB
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 - 2007
Y1 - 2007
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 - state dependence
KW - export activity
KW - dynamic binary choice models
KW - fixed effects
M3 - Working paper
BT - True Versus Spurious State Dependence in Firm Performance
PB - Centre for Industrial Economics, Department of Economics, University of Copenhagen
ER -
ID: 839782