Is Previous Export Experience Important for New Exports?

Recent models of international trade show that trade costs are important determinants of exporting decisions. These theories, however, do not take into account that experienced firms may have lower trade costs, or that new exporters may reduce these costs by observing other exporters' decisions. We argue that previous experience exporting a product, or to a market, helps reduce entry costs for firms in international markets. Using firm-level data from Chile, with information on exports by product and destination market, we find that previous export experience significantly influences a firm's decision to introduce a new product to a new market.