Entry Costs and Increasing Trade

William Lincoln () and Andrew McCallum

No 619, Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: Using confidential microdata from the US Census, we find that the fraction of manufacturing plants that export rose from 21% in 1987 to 39% in 2006. It has been suggested that similar trends in other countries may have been caused by declining costs of entering foreign markets. Our study tests this hypothesis for the first time. Both reduced form and structural estimation approaches find little evidence that the entry costs declined significantly in the US over this period. We instead argue that changes in other factors that determine export status are sufficient to explain these trends.

Keywords: entry costs; extensive margin (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2011-11-04
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:mie:wpaper:619

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