1 Multimarket entry in exporting

This paper develops a model to explain a firm’s optimal export entry strategy in an economy where the firm has multiple potential export markets. The firm’s costs of entry to an export market are reduced by the experience gained from other markets already entered, so that both the set of markets and the timing of entry to those markets are important. The model is able to explain why different firms enter different numbers of markets in the long-term, as well as explaining patterns of entry that involve either simultaneous or sequential entry, where sequential entry may involve progressions of increasing or decreasing market sizes. The model predicts that more productive firms employ strategies that generally involve entering more markets, larger markets, and entering markets more rapidly. More productive firms also tend to enter larger then smaller markets whereas less productive firms tend to enter smaller then larger markets. Though firms enter different sets of markets and the orders in which exporters enter markets are different, the model predicts a hierarchy of export markets and a correlation in the orders of market entry