Where do firms export, how much, and why?

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Title: Where do firms export, how much, and why?
Authors: Lawless, Martina
Whelan, Karl
Permanent link: http://hdl.handle.net/10197/2063
Date: Apr-2008
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.
Funding Details: 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: en
Status of Item: Not peer reviewed
Conference Details: 22nd Annual Conference of the Irish Economic Association, Westport, Co. Mayo, 25-27 April, 2008
Appears in Collections:Economics Research Collection

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