NDLI: Dynamic effects of institutions on firm-level exports

Content Provider	Springer Nature Link
Author	Söderlund, Bengt Tingvall, Patrik Gustavsson
Copyright Year	2013
Abstract	The gap between theoretically predicted trade patterns and actual trade suggests that our understanding of what shapes trade patterns is incomplete. Institutional barriers may be one factor behind this gap, and recent research suggests that institutions are a greater obstacle to trade than tariffs. Using detailed firm-level data, we analyze how institutional quality in recipient countries affects exports by Swedish firms. Our results suggest that weak institutions in recipient countries make exports to these countries less likely and that exports to countries with weak institutions are characterized by relatively short duration and small volume. Analyzing long-term trade flows, we identified a learning process where exporters become less dependent on institutional quality in the target economy over time. More specifically, in addition to previous research that emphasize learning related to knowledge about the contracting partner and rule of law, we extend this notion and show that there is also a learning process where firms acquire knowledge about the general business climate. When learning about the contractual partner and business institutions in recipients countries takes place, exports increase relatively quickly during the first 2 years of exports and thereafter levels out. Hence, firms that are initially sensitive to weak institutions, start small, and learn how to handle foreign institutions are likely to be most successful in maintaining long-term relationships with foreign markets.
Starting Page	277
Ending Page	308
Page Count	32
File Format	PDF
ISSN	16102878
Journal	Weltwirtschaftliches Archiv
Volume Number	150
Issue Number	2
e-ISSN	16102886
Language	English
Publisher	Springer Berlin Heidelberg
Publisher Date	2013-12-10
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Exports Institutions Firm-level data Export dynamics International Economics European Integration Macroeconomics/Monetary Economics Economic Policy Financial Economics
Content Type	Text
Resource Type	Article
Subject	Economics, Econometrics and Finance

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
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9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

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