Bilateral Relations in a Context of Geopolitical Change
Edited by Peter A.G. van Bergeijk and Selwyn J.V. Moons
Chapter 12: Passing export hurdles with a little help from my friends
The author discusses and compares various ways in which firms can overcome export barriers through analysing a microdata panel of 16,500 Dutch exporters for the years 2003–07. Based on previous work, he analyses a stepping stone strategy for discovering new export markets and economic diplomacy instruments, for example trade missions and trade posts. A stepping stone strategy seems particularly effective for approaching markets close to existing export markets. The effects are export market, sector and firm specific. The presence of trade posts and trade missions to particularly middle income countries stimulate the entry to new markets by 0.05 to 0.15 percentage points. Trade posts do not seem to be effective in developed markets. Although government diplomacy could make the difference between exporting and not exporting to a country, the firm characteristics are much more important such as size, productivity, export experience and stepping stone markets.
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