Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110371
Authors: 
Dalgic, Basak
Fazlioglu, Burcu
Gasiorek, Michael
Year of Publication: 
2015
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 9 [Issue:] 2015-15 [Pages:] 1-28
Abstract: 
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. The authors use a rich and recent dataset for Turkish manufacturing firms for the period 2003 - 2010. This allows them to provide a comprehensive analysis of firm heterogeneity and the connection between firm-level performance and international trade. They provide evidence on the remarkable heterogeneity across firms where only-importers (importers) perform better than only-exporters (exporters). The authors 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. Tariffs represent a potentially important source of variation in the variable costs of trading. When taking the tariffs faced by firms into account, the authors 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.
Subjects: 
firm heterogeneity
self-selection
sunk costs
exports
imports
JEL: 
D22
F14
L10
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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