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Where do firms export, how much, and why?
Author(s)
Date Issued
2008-04
Date Available
2010-06-09T16:11:14Z
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.
Sponsorship
Not applicable
Type of Material
Conference Publication
Publisher
Irish Economic Association
Copyright (Published Version)
2008, The Irish Economic Association
Subject – LCSH
Exports--Ireland
Industrial productivity--Ireland
Export trading companies--Ireland
Language
English
Status of Item
Not peer reviewed
Conference Details
22nd Annual Conference of the Irish Economic Association, Westport, Co. Mayo, 25-27 April, 2008
This item is made available under a Creative Commons License
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