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Firm‐Level Investment And Export Dynamics

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  • Youngwoo Rho
  • Joel Rodrigue

Abstract

This article characterizes the complementarity between exporting and investment in physical capital. We argue that new investment allows young exporters to grow faster and survive longer in export markets while reducing their vulnerability to productivity or demand shocks across markets. We structurally estimate our model using detailed firm‐level data. We find that the choice of cost structure has a large impact on model performance and the estimated costs of exporting or investment. Using detailed capital and output tariff rates, we quantify the impact of policy change on aggregate export and investment growth.

Suggested Citation

  • Youngwoo Rho & Joel Rodrigue, 2016. "Firm‐Level Investment And Export Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 271-304, February.
    • Handle: RePEc:wly:iecrev:v:57:y:2016:i:1:p:271-304
    DOI: 10.1111/iere.12156
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