THE EXPORT DECISION - PLANT CHARACTERISTICS, EXTERNALITIES AND ENTRY COSTS:
EVIDENCE FROM TURKISH MANUFACTURING INDUSTRY

Şule ÖZLER (UCLA)
Erol TAYMAZ (METU)
Kamil YILMAZ (Koç University)

We study a model of exporting decision using plant level data from Turkish manufacturing sector over 1991-96. Our analysis of exporting decision shows that exporters are almost 3 times more likely to export next period, a result that supports the presence of sunk costs in the export markets. In addition, we show that the plant characteristics play an important role in the export decision. In particular, plant size, the average wage rate, capital intensity and relative labor productivity are likely to affect the exporting decision positively. In terms of technology transfers, only embodied technology transfers in the form of imported M&E machinery affects the exporting decision. The agglomeration effects in production and exporter spillovers also do increase the likelihood of becoming an exporter. Finally, those plants that use subcontracted inputs are likely to become exporters, whereas the plants that subcontract their output have lower probability of becoming exporters.