I thank my advisors: Sam Kortum and Tom Holmes. I also thank Jim Schmitz, Clarissa Yeap and Tim Kehoe for comments and Qianqian Wang for research assistance.
The Location of US States' Overseas Offices
Version of Record online: 13 DEC 2013
© 2013 John Wiley & Sons Ltd
Review of International Economics
Volume 22, Issue 2, pages 310–325, May 2014
How to Cite
Cassey, A. J. (2014), The Location of US States' Overseas Offices. Review of International Economics, 22: 310–325. doi: 10.1111/roie.12109
- Issue online: 1 APR 2014
- Version of Record online: 13 DEC 2013
Forty US states operated an overseas office in 2002. Treating overseas offices as sales offices, the model assumes offices facilitate exports by reducing the transaction cost of selling abroad. From theory, states operate an office if aggregate savings outweigh operating costs. Exploiting the differences in where states locate offices in the data, and controlling for aggregate characteristics, the paper estimates the impact of exports on the probability of an office existing. In addition, the average state savings from an office is 0.04–0.10% of exports, with a cut-off threshold of US$850 million.