Sunk Costs, Industry Heterogeneity, Expected Profitability And Decision To Export: Evidence Form Turkish Manufacturing

This paper tests both the role of sunk costs which are sources of barrier to entry and future expected profitability on exporting using a panel data set of Turkish manufacturing industries for the period 2003-2008, allowing for sunk costs to be different for small and large industries. To obtain con...

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Bibliographic Details
Published in:IIB : international refereed academic social sciences journal 2014-05, Vol.5 (14)
Main Author: Arvas,M. Akif
Format: Article
Language:English
Subjects:
İktisat & İşletme & Finans
Siyasal Bilimler
Online Access:Get full text
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Summary:This paper tests both the role of sunk costs which are sources of barrier to entry and future expected profitability on exporting using a panel data set of Turkish manufacturing industries for the period 2003-2008, allowing for sunk costs to be different for small and large industries. To obtain consistent estimates for sunk costs, all other sources of persistence are controlled for through dynamic multivariate probit model. Results show that sunk costs matter for decision to export and small industries face significantly higher sunk costs than large industries. It is also found evidence that capital accumulation and increasing labor quality lead industries to tend to less export, while productivity and industry size have positive impacts on exporting.
ISSN:2146-5886
2147-172X