Experience and market signals in export entry decisions

Beverly Mendoza

The World Economy, 2022, vol. 45, issue 1, 176-199

Abstract: Export entry deterrence is a result of export uncertainty, which inhibits the discovery of new exports and prevents a country from realising its true comparative advantage. This paper examines how firms resolve uncertainty through the combination of two learning channels: learning from others and their own export experience. Using Chilean customs data (2007–2016), I find that early entrants have a short export duration and have little export experience. When combining the two learning channels, I find that less experienced exporters are more responsive to new information. Significantly, when observing a 10% increase in average initial export growth, less experience firms have double the entry probability compared with more experienced firms.

Date: 2022
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