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Costs of trade and self-selection into exporting and importing: the case of Turkish manufacturing firms

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posted on 2023-06-08, 21:37 authored by Basak Dalgic, Burcu Fazlioglu, Michael GasiorekMichael Gasiorek
This paper focuses on self-selection into trade by exporting and importing firms, and on the presence of differential variable and sunk costs between exporters and importers across different categories of imports. We use a rich and recent dataset for Turkish manufacturing firms for the period 2003-10.This allows us to provide a comprehensive analysis of firm heterogeneity and the connection between firm-level performance and international trade. We provide evidence on the remarkable heterogeneity across firms where only-importers (importers) perform better than only-exporters (exporters). We detect a self-selection effect for both importing and exporting firms with a stronger effect for importers. The results suggest that the nature of sunk costs varies between importing and exporting activities with importers facing higher sunk costs. Tari§s represent a potentially important source of variation in the variable costs of trading. When taking the tariffs faced by firms into account, we find that the self-selection effect associated with sunk costs is still present but greatly reduced with a smaller reduction for importers compared to exporters.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Economics

ISSN

1864-6042

Publisher

Economics

Issue

15

Page range

1-28

Department affiliated with

  • Economics Publications

Notes

Published in Special Issue Micro-econometric Analyses of International Firm Activities

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2015-07-14

First Open Access (FOA) Date

2015-07-14

First Compliant Deposit (FCD) Date

2015-07-14

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