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/10197/971
Date: 22-Sep-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.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Copyright (published version): University College Dublin. School of Economics, 2008
Subject LCSH: Exports--Ireland
Industrial productivity--Ireland
Export trading companies--Ireland
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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