%0 Report
        %A Naudé, Wim
%A Gries, Thomas
%A Bilkic, Natasa
        %T Firm-Level Heterogeneity and the Decision to Export: A Real Option Approach
        %D 2013
        %8 2013 Apr
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 7346
        %U https://www.iza.org/publications/dp7346
        %X In "new" new international trade theory, whether firms export or not are determined by their productivity. These models assume that firms enter a market to find their productivity levels revealed to them as in a lottery. In this paper we propose an alternative way to model whether firms export or not, namely as a firm-level decision akin to an investment decision with a real option value. We show that endogenizing the export decision is consistent with patterns of productivity and exporting reported in the empirical literature.
        %K international new ventures
%K firm-level heterogeneity
%K start-ups
%K stochastic dynamic programming
%K trade
%K exports
%K productivity
%K real option theory
%K investment
%K firms
%K international entrepreneurship