Abstract
There are crucial differences between exporting to a lesser-known market and exporting to a well-known market. I define a well-known (lesser-known) market if exporters have complete (incomplete) information about importers' characteristics such as contract viability. This risk premium between a well-known market and a lesser-known market causes lower export volume to lesser-known markets. I find that government-supported export insurance policies can increase the total volume of exports to lesser-known markets. Moreover, this paper argues that mostly medium-sized firms are getting benefits from this policy.
Keywords
References
- Crozet, M., P. Koenig, and V. Rebeyrol (2008), “Exporting to Insecure Markets: A Firm-level Analysis”, CEPII Research Center Working Papers, 2008-13.
- Leung, D., C. Meh, and Y. Terajima (2008), “Are There Canada-U.S. Differences in SME Financing?”, Bank of Canada Working Paper, 2008-45.
- Melitz, M. (2003), “The Impact of Trade on Aggregate Industry Productivity and Intra-Industry Reallocations”, Econometrica, 71 (6), 1695–1725.
- Melitz, M. and G.I.P. Ottaviano (2008), “Market Size, Trade and Productivity”, Review of Economic Studies, Volume 75, Issue 1, pp. 295–316.
- Van Ark, B., and E. Monnikhof (1996), “Size Distribution of Output and Employment: A Data Set for Manufacturing Industries in Five OECD Countries, 1960s-1990”, OECD Economics Department Working Paper, No.166.
Abstract
There are crucial differences between exporting to a lesser-known market and exporting to a well-known market. I define a well-known (lesser-known) market if exporters have complete (incomplete) information about importers' characteristics such as contract viability. This risk premium between a well-known market and a lesser-known market causes lower export volume to lesser-known markets. I find that government-supported export insurance policies can increase the total volume of exports to lesser-known markets. Moreover, this paper argues that mostly medium-sized firms are getting benefits from this policy.
Keywords
References
- Crozet, M., P. Koenig, and V. Rebeyrol (2008), “Exporting to Insecure Markets: A Firm-level Analysis”, CEPII Research Center Working Papers, 2008-13.
- Leung, D., C. Meh, and Y. Terajima (2008), “Are There Canada-U.S. Differences in SME Financing?”, Bank of Canada Working Paper, 2008-45.
- Melitz, M. (2003), “The Impact of Trade on Aggregate Industry Productivity and Intra-Industry Reallocations”, Econometrica, 71 (6), 1695–1725.
- Melitz, M. and G.I.P. Ottaviano (2008), “Market Size, Trade and Productivity”, Review of Economic Studies, Volume 75, Issue 1, pp. 295–316.
- Van Ark, B., and E. Monnikhof (1996), “Size Distribution of Output and Employment: A Data Set for Manufacturing Industries in Five OECD Countries, 1960s-1990”, OECD Economics Department Working Paper, No.166.
Details
| Primary Language | English |
|---|---|
| Journal Section | Articles |
| Authors | |
| Publication Date | December 1, 2010 |
| Submission Date | December 12, 2014 |
| Published in Issue | Year 2010 Volume: 13 Issue: 13 |
