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| Author: | Medin, H. |
| Title: | Firms' export decisions - fixed trade costs and the size of the export market |
| Journal: | Journal of International Economics
2003 : OCT, VOL. 61:1, p. 225-241 |
| Index terms: | Product differentiation International trade Exporting Fixed costs |
| Language: | eng |
| Abstract: | This article gives a theoretical background for explaining how the size of export markets affects the share of exporting firms in increasing returns to scale sectors. The author argues that in contrast to what is predicted in the standard new trade theory, the size of the foreign market should matter for profitability of export. The author further argues that thare are fixed costs of exporting. The presented model shows that reduced fixed export costs have similar effects to reduced variable costs. |
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