What Explains Indirect Exports of Goods and Services in Eastern Europe and Central Asia?
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Title
What Explains Indirect Exports of Goods and Services in Eastern Europe and Central Asia?Date
2018-05Publisher
SpringerBibliographic citation
MARTÍNEZ ZARZOSO, Inmaculada; JOHANNSEN, Florian. (2018). What Explains Indirect Exports of Goods and Services in Eastern Europe and Central Asia? Empirica, v. 45, Issue 2, p. 283–309Type
info:eu-repo/semantics/articlePublisher version
https://link.springer.com/article/10.1007/s10663-016-9361-3Version
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Abstract
This paper investigates the determinants of indirect exporting, using firm-
level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting
depends on a combination of fixed and variable trade ... [+]
This paper investigates the determinants of indirect exporting, using firm-
level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting
depends on a combination of fixed and variable trade cost factors. We first
hypothesize that firms that perceive customs, transportation, crime and legal sys-
tems as severe obstacles anticipate higher fixed costs and are more likely to export
indirectly. The second hypothesis is that indirect exporting tends to be a temporary
strategy. Econometric models are used to test the first hypothesis and transition
matrices to test the second. In particular, probit, Heckman-probit and fractional
response models are estimated to analyse the determinants of the export mode and
the share of indirect exports. The results indicate that the factors that account for the
fixed cost of exporting, mainly affect the decision to export indirectly (extensive
margin), but some of them also affect, to a lesser extent, the amount exported
indirectly (intensive margin). More specifically, factors such as customs and trade
restrictions and transportation obstacles affect the extensive margin only, whereas
crime affects both margins. Secondly, trade agreement membership mainly affects
trade in manufactured goods, while exchange rate volatility affects positively the
extensive and intensive margin of indirect exports of services. The results also
indicate that firms are more likely to change their status as an indirect exporter than
they are to change their status as a direct exporter or a non-exporter, which provides
support to the second hypothesis. [-]
Is part of
Empirica (2018), v. 45, Issue 2Investigation project
Financial support from the Spanish Ministry of Economy and Competitiveness is grateful acknowledged (ECO2014-58991-C3-2-R).Rights
http://rightsstatements.org/vocab/CNE/1.0/
info:eu-repo/semantics/openAccess
info:eu-repo/semantics/openAccess
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- ECO_Articles [696]