Publication Type

Working Paper

Publication Date

8-2014

Abstract

The paper provides a first structural-estimation-based assessment of an influential hypothesis that export pioneers are too few relative to social optimum due to knowledge spillover in new market explorations. Such market failure requires two inequalities to hold simultaneously: the discovery cost is greater than any individual firm’s expected profit but Smaller than the sum of all potential exporters’ expected profits. Neither has to hold in the data. We estimate the structural parameters based on the customs data of Chinese electronics exports. While we find positive discover cost and spillovers, "missing pioneers" are nonetheless a low probability event.

Discipline

Econometrics

Research Areas

Applied Microeconomics

First Page

1

Last Page

63

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://abfer.org/docs/2015/program-4/assessing-market-failures-in-export-pioneering-activities-a-structural-estimation-approach.pdf

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Econometrics Commons

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