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Where do firms export, how much, and why?
Author(s)
Date Issued
2008-09-22
Date Available
2009-03-30T15:33:33Z
Abstract
The empirical finding that exporting firms are more productive on average than non-exporters has provoked a large theoretical literature based on models such as Melitz (2003), where more productive firms are more likely to overcome costs associated with trade. This paper provides a systematic empirical assessment of the Melitz framework using a unique Irish
dataset that includes information on destinations and firm characteristics such as productivity. We find a number of interesting deviations from the model’s predictions including a high degree of unpredictable idiosyncratic participation in export markets by firms, a relatively
weak positive correlation between the extent of export participation and export sales, and a limited role for productivity in explaining firm exporting behavior. We illustrate the effect of firm heterogeneity on gravity regressions of aggregate trade flows and show how past exporting to a particular market has a strong impact on the current probability of exporting there.
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP08/21
Copyright (Published Version)
University College Dublin. School of Economics, 2008
Subject – LCSH
Exports--Ireland
Industrial productivity--Ireland
Export trading companies--Ireland
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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