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Market‐specific Sunk Export Costs: The Impact of Learning and Spillovers
Author(s) -
Maurseth Per Botolf,
Medin Hege
Publication year - 2017
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12420
Subject(s) - sunk costs , spillover effect , economics , product (mathematics) , panel data , industrial organization , microeconomics , econometrics , geometry , mathematics
Firms may face sunk costs when entering an export market. Previous studies have focused on global or country‐specific sunk export costs. This study analyses the importance of market‐ specific sunk export costs (defining ‘market’ as a product–country combination). We also study how market‐specific export costs can be affected by various kinds of learning and spillover effects. We use firm‐level panel data for Norwegian seafood exports distributed on products and countries. The results lend support to the hypothesis of market‐specific sunk costs. We also find evidence of learning and spillover effects, particularly within the same product group.