To be exporter or not to be exporter? Entry–exit dynamics of Turkish manufacturing firms

Abstract

Rapidly growing trade literature has highlighted the importance of firm-level analysis. Building on recent empirical results, this paper examines export behaviour of Turkish manufacturing firms for the period of 1989–2010 from survival analysis perspective. This contributes to the existing empirical literature using Turkish data. Moreover, it provides additional new insight about the exporting behaviour of the firms since this is the first and unique application for the Turkish manufacturing sector. Using duration models, we found that export market entry and exit dynamics differ considerably for the Turkish manufacturing firms. Duration to become exporter is found to be shortening with size, productivity, financing and capital intensity. Domestic market profitability, on the other hand, is found to decrease export incentive which is characterized as risk-averse properties of the Turkish firms. Export market survival is found to depend mainly on size, productivity, external financing and quality production. In order to increase export market survival probability and duration, export starters have to invest for increasing their quality competition power.