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

The behaviour of exporters attracts the attention of researchers and policy makers interested in the competitiveness of their economies. Through participation on the international market, domestic firms can generate foreign exchange needed to pay for imports and learn about new technologies which can be used at home to improve the overall competitiveness of their industries. The paper develops a model in which the ability of firms from transition economies to compete on the international market is defined as a function of their activities, characteristics and features of their environment. The results of our research indicate that sunk costs of entry, technology transfer, innovations and competition play an important role for the decision of firms to export, while once they are on the international market cost advantages become more important.