> location and industry are included in _Z jkt_ . As in Section (4) above, I will identify the effects of geography and firm characteristics for firms within a given industry and location, and then for a given firm.

# **5.1 Across Firms**

The first set of results is presented in Table 6, wherein the model specifications are the same as those in Table 4. However, the dependent variable is now the log of total exports of the firm, since I am mainly interested in understanding the factors that affect the intensity of participation in export markets.

The first striking result is that lagged productivity has a negative effect on value of exports – in fact a 1 percent increase in productivity seems to lower exports by anything between 29 to 33 percent. Age is also negatively associated with export intensity, indicating that younger firms tend to export more. And, intuitively, the size of the firm is positively associated with exports.

The clustering of exporters within the district seems to affect export intensity negatively, while the clustering of exporters of the same industry within the district has a positive effect. A percentage increase in the number of same-industry exporters within the district increases the value of exports by 16 percent. In the same vein, more general clustering, i.e. clustering of firms within the same industry, has a positive and significant coefficient. Thus, there is some evidence of positive externalities of within-industry clustering on the intensity of a firm’s participation in export markets. Access to suppliers has a positive effect, and access to buyers has a negative effect, although these coefficients are not statistically significant once infrastructure and other variables are controlled for.

Market access has a negative effect, although the magnitude of the effect is small. Access to the closest port has a negative effect suggesting that firms closer to large trading ports are more likely to export more. In fact a 1-minute increase in the traveltime distance to the closest port decreases exports by 0.11 percent (see model 6). It seems that being located close to a port does not affect the odds of starting to export (see the result in Table 4) but that it does positively affect the intensity of export participation. Firms close to a large trading port are not more likely to start exporting, but once they do start exporting they are more likely to export more.

Infrastructure variables seem to be statistically insignificant in all cases, except for road density, which seems to suggest that higher density is associated with more intensive exporting, although the effect is insignificant and negative with the introduction of institutional variables and location fixed-effects. And lastly, whilst social unrest might negatively affect the propensity of firms to turn to foreign markets, once they do start exporting it is no longer statistically significant. In fact, the flexibility of labor regulations now seems to be much more important – more probusiness regulations are associated with higher intensity of exports.

regressions, but find that these models do not converge with the introduction of firm fixedeffects.

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