Understanding Export Market Success: Evidence from Manufacturing Firms

Abstract

In this paper, we analyse empirically the determinants of the decision to export, and the export share of manufacturing firms using a large balanced panel database of firms from Spain, spanning from 1990 to 2012. We are particularly interested in investigating these determinants by controlling for state dependence, unobserved heterogeneity and endogenous initial conditions of firms. Our findings reveal that firms show a high persistence in export behaviour, and that export volume changes are determined primarily by changes in the intensive margin. In addition, our research suggests that having exported before, having achieved a certain productivity level and being large and foreign-owned, greatly increased the probability of exporting. Moreover, these results hold even for the export share of firms, except for productivity and foreign capital, which seem to be less relevant.