Entrepreneurship and the Extensive Margin in Export Growth : A Microeconomic Accounting of Costa Rica’s Export Growth during 1997–2007

Entrepreneurship and the Extensive Margin in Export Growth : A Microeconomic Accounting of Costa Rica’s Export Growth during 1997–2007

The literature on the correlation between exports and economic development runs deep into the history of economic thought and permeates policy debates. This paper studies the microeconomic structure of export growth in Costa Rica, with special emph...

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Bibliographic Details
Main Authors: Lederman, Daniel, Rodríguez-Clare, Andrés, Yi Xu, Daniel
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
BASE YEAR
CENTRAL BANK
CLASSICAL ECONOMISTS
COMPETITIVENESS
ECONOMIC PERFORMANCE
ECONOMIC RESEARCH
ENTREPRENEURSHIP
EXPANSIONS
EXPORT GROWTH
EXPORT MARKET
EXPORT MARKETS
EXPORT PERFORMANCE
EXPORTS
FINANCIAL CRISIS
FIRM SIZE
FIRMS
GDP
GDP PER CAPITA
GROSS DOMESTIC PRODUCT
GROSS DOMESTIC PRODUCT PER CAPITA
GROWTH RATE
HISTORY OF ECONOMIC THOUGHT
INCOME
INCOME GROUPS
INTERNATIONAL TRADE
MARGINAL COSTS
MARKET ACCESS
MEDIUM ENTERPRISES
MERCHANDISE
MERCHANDISE EXPORT
MERCHANDISE EXPORTS
MICROECONOMIC ANALYSES
MULTINATIONAL
MULTINATIONAL CORPORATIONS
PRODUCER PRICE
PRODUCER PRICE INDEX
PURCHASING
PURCHASING POWER
RANGE
RIGHT-HAND SIDE
ROUGH
SALES
SMALL FIRMS
STRUCTURAL CHANGE
THIRD MARKETS
TURNOVER
WAGES
WORLD TRADE ORGANIZATION
WTO
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100722112111
http://hdl.handle.net/10986/3860
Description
Summary:The literature on the correlation between exports and economic development runs deep into the history of economic thought and permeates policy debates. This paper studies the microeconomic structure of export growth in Costa Rica, with special emphasis on the extensive margin of trade, encompassing new exporting firms, new products, and new export markets, as well as the unit values of new versus incumbent products. The data suggest that few new firms survive the test of exporting -- more than 40 percent of firms exit export activities after one year -- and this firm turnover is associated with a steady deterioration of export unit values (prices). Furthermore, most new export products are associated with product switching by incumbent exporting firms. The typical new product introduced by incumbent firms tended to be priced at about 90 percent of the unit values of incumbent products. In contrast, the usual suspected obstacles to export growth, such as the inability of small firms to enter exporting activities or to grow their exports, appear to be important sources of export growth. In fact, the smallest exporting firms experienced the fastest growth in their export values. Some of these results are compared with those from other countries that have been examined in related literature.

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