Search

Dynamic effects of institutions on firm-level exports

PublicationArticle (with peer review)
Bengt Söderlund, Export, Företagandets villkor, Institutionell ekonomi, Mikrodata, Patrik Tingvall

Abstract

The gap between theoretically predicted trade patterns and actual trade suggests that our understanding of what shapes trade patterns is incomplete. Institutional barriers may be one factor behind this gap, and recent research suggests that institutions are a greater obstacle to trade than tariffs. Using detailed firm-level data, we analyze how institutional quality in recipient countries affects exports by Swedish firms. Our results suggest that weak institutions in recipient countries make exports to these countries less likely and that exports to countries with weak institutions are characterized by relatively short duration and small volume. Analyzing long-term trade flows, we identified a learning process where exporters become less dependent on institutional quality in the target economy over time. More specifically, in addition to previous research that emphasize learning related to knowledge about the contracting partner and rule of law, we extend this notion and show that there is also a learning process where firms acquire knowledge about the general business climate. When learning about the contractual partner and business institutions in recipients countries takes place, exports increase relatively quickly during the first 2 years of exports and thereafter levels out. Hence, firms that are initially sensitive to weak institutions, start small, and learn how to handle foreign institutions are likely to be most successful in maintaining long-term relationships with foreign markets.

Related content: Working Paper No. 184

Söderlund, B. & Gustavsson Tingvall, P. (2014). Dynamic effects of institutions on firm-level exports.Review of World Economics, 150(2), 277-308. DOI: 10.1007/s10290-013-0181-2


Similar content

Ratio Working Paper No. 335 International Trade and Labor Market Integration of Immigrants
Working paperPublication
Lodefalk, M., Sjöholm, F. & Tang, A.
Publication year

2020

Published in

Ratio Working Paper

Abstract

We examine if international trade improves labor market integration of immigrants in Sweden. Immigrants participate substantially less than natives in the labor market. However, trading with a foreign country is expected to increase the demand for immigrants from that country. By hiring immigrants, a firm may access foreign knowledge and networks needed to overcome information frictions in trade. Using granular longitudinal matched employer–employee data and an instrumental variable approach, we estimate the causal effects of a firm’s bilateral trade on employment and wages of immigrants from that country. We find a positive, yet heterogeneous, effect of trade on immigrant employment but no effect on immigrant wages.

Working Paper no. 328 Wholesale firms: A catalyst for Swedish exports?
Working paperPublication
Daunfeldt, S-O., Engberg, E., Halvarsson, D., Kokko, A. & Tingvall, P.
Publication year

2019

Published in

Ratio Working Paper

Abstract

This paper examines the role of wholesale firms as facilitators of exports for small and medium-sized Swedish businesses. Our findings suggest that wholesale firms do facilitate access to difficult markets located outside Europe. For exports of a particular good to a given market, we observe a positive correlation between the export volumes of wholesale and manufacturing firms. Finally, we present evidence that supports a prediction from recent trade models with differentiated firms, namely that wholesale firms can facilitate exports for firms that are not themselves capable of direct exports.

The openness of open innovation in ecosystems
Article (with peer review)Publication
Öberg, C., & Alexander, A.
Publication year

2019

Abstract

Open innovation has rendered increased interest both in practice and research, and has expanded from dyadic transfers of ideas, to ecosystem levels. Knowledge is at the heart of open innovation, and this paper describes and discusses knowledge-transfer linkages for open innovation. It does so based on a literature review. The paper links together open innovation research with general management research to categorise and discuss linkages among parties in terms of their openness and how they relate to knowledge management. Conclusions indicate that openness needs to be considered in different dimensions that also links to different knowledge management outcomes. The paper’s contribution consists of how it connects open innovation research to the general management literature, and how it builds a practical understanding of how linkages between firms can be categorised to aid firms to consider which mechanisms they may choose and why.

Show more

Postgiro: 382621-1

|

Bankgiro: 512-6578