Market-specific Sunk Export Costs: The Impact of Learning and Spillovers
Journal article, Peer reviewed
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Original versionThe World Economy. 2017, 40 (6), 1105-1127. 10.1111/twec.12420
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.