This paper studies the microeconomic structure of export growth in Costa Rica, emphasizing on the development of new exporting firms, products, and export markets. The authors suggest that more than 40 percent of firms exit export activities after one year. This firm turnover is associated with a steady deterioration of export unit values (prices). Moreover, the paper highlights how the usual suspected obstacles to export growth appear to be important sources of export growth in Costa Rica. In order to evaluate their claims, the authors compares the value of total Costa Rican merchandise exports in the PROCOMER database with the World Bank’s data on total merchandise exports, which was provided by official government sources, including Costa Rica’s Central Bank.
This document is organized as follows. After the introduction, section two briefly compares Costa Rica’s export and GDP growth performance during 1997-2007 with other countries and regions. Meanwhile, chapter three discusses the PROCOMER data by comparing it with other data sources on Costa Rican exports. Chapter three presents the microeconomic accounting frameworks used to assess the contribution of new firms, products and export market destinations to Costa Rica’s export growth in the short run and in the long run, whereas chapter four briefly reviews the methodology introduced to analyze export markets. Finally, section five provides some concluding arguments by summarizing the findings made.
The authors conclude that:
- Costa Rica’s export performance was limited by the inability of firms to survive the “exporting test” and by a steady deterioration of export unit values (prices)
- during the study period, over 40 percent of firms exited export activities after just one year
- in the short run, export growth was due to the exports of relatively large firms
- Costa Rica’s export growth since 1997 was determined by firm dynamics and small firms’ exporting activities
The document is available in English.
