Article
What explains indirect exports of goods and services in Eastern Europe and Central Asia?
Empirica
(2018)
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 cost factors. We first hypothesize that firms that perceive customs, transportation, crime and legal systems 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 …
Disciplines
Publication Date
2018
Citation Information
Inmaculada Martinez-Zarzoso and Florian Johannsen. "What explains indirect exports of goods and services in Eastern Europe and Central Asia?" Empirica Vol. 45 Iss. 2 (2018) p. 283 - 309 Available at: http://works.bepress.com/inma_martinez_zarzoso/52/