How Exporters Grow

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Title: How Exporters Grow
Authors: Fitzgerald, Doireann
Haller, Stefanie
Yedid-Levi, Yaniv
Permanent link: http://hdl.handle.net/10197/8363
Date: Jan-2017
Abstract: We document how export quantities and prices evolve after entry to a market. Controlling for marginal cost, and taking account of selection on idiosyncratic demand, there are economically and statistically significant dynamics of quantities, but no dynamics of prices. To match these facts, we estimate a model where firms invest in customer base through non-price actions (e.g. marketing and advertising), and learn gradually about their idiosyncratic demand. The model matches quantity, price and exit moments. Parameter estimates imply costs of adjusting investment in customer base, and slow learning about demand, both of which generate sluggish responses of sales to shocks.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 42
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2017/02
Copyright (published version): 2017 the authors
Keywords: Exporter dynamicsCustomer baseLearning
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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