TY  - JOUR
AU  - Bernard,Andrew B.
AU  - Wagner,Joachim
TI  - Export Entry and Exit by German Firms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6538
PY  - 1998
Y2  - April 1998
UR  - http://www.nber.org/papers/w6538
L1  - http://www.nber.org/papers/w6538.pdf
N1  - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH  03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu
AB  - This paper examines the decision to enter the export market by German firms. While exports have played an important role in recent German business cycle movements, little is known about the export supply response of German firms. This paper presents a dynamic model of the export decision by a profit-maximizing firm. Using a panel of German manufacturing plants, we test for the role of plant characteristics and sunk costs in the entry decision. We find evidence for substantial sunk costs in export entry; exporting today by a plant increases the probability that the plant will export tomorrow by 50%. This advantage depreciates quickly, falling by two thirds in a year. We also find evidence that plant success, as measured by size and productivity, increases the likelihood of exporting.
ER  -