Restructuring and Barriers: Cross-Country Evidence on the Competitiveness of Exporters in Transition

The behaviour of exporters attracts the attention of researchers andpolicy makers interested in the competitiveness of their economies.Through participation on the international market, domestic firms cangenerate foreign exchange needed to pay for imports and learn aboutnew technologies which can be used at home to improve the overallcompetitiveness of their industries. The paper develops a model inwhich the ability of firms from transition economies to compete on theinternational market is defined as a function of their activities, characteristicsand features of their environment. The results of our researchindicate that sunk costs of entry, technology transfer, innovations andcompetition play an important role for the decision of firms to export,while once they are on the international market cost advantages becomemore important.