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The micro dynamics of exporting: evidence from French firms

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  • Ines Buono

    ()
    (Bank of Italy)

  • Harald Fadinger

    ()
    (University of Vienna)

Abstract

The paper investigates the dynamics of export relationships – defined as shipments by a given firm to a given destination in a given year – in a panel of almost 25,000 French exporters over the five-year period 1995-1999. It describes how the relationships evolve over time, presenting a number of stylized facts that are related to various theories of export dynamics, such as a dynamic sunk-cost model and the recent literature on exporting and learning. We find that export relationships are highly dynamic: a large fraction are created or concluded every year, and the values within relationships fluctuate substantially. Most of these dynamics are explained by relationship-specific shocks, not supply or demand shocks. Also, export values are small at first but gradually increase as relationships mature. Finally, while many export relationships are volatile, others are persistent. Previous exports to a destination substantially increase a firm’s probability of making current exports there. Taken together, these facts correspond better to the learning than to the sunk-cost hypothesis.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 880.

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Date of creation: Sep 2012
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Handle: RePEc:bdi:wptemi:td_880_12

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Keywords: trade dynamics; extensive and intensive margin; firm heterogeneity;

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  1. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2010. "Exports and sectoral financial dependence: evidence on French firms during the great global crisis," Working Paper Series 1227, European Central Bank.
  2. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  3. James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," Cowles Foundation Discussion Papers 1218, Cowles Foundation for Research in Economics, Yale University.
  4. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2004. "Dissecting Trade: Firms, Industries, and Export Destinations," American Economic Review, American Economic Association, vol. 94(2), pages 150-154, May.
  5. Romain Aeberhardt & Ines Buono & Harald Fadinger, 2009. "Learning, Incomplete Contracts and Ecport Dynamics: Theory and Evidence from French Firms," Vienna Economics Papers 1006, University of Vienna, Department of Economics.
  6. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
  7. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," NBER Working Papers 11393, National Bureau of Economic Research, Inc.
  8. Luis Araujo & Emanuel Ornelas, 2007. "Trust-based trade," LSE Research Online Documents on Economics 19693, London School of Economics and Political Science, LSE Library.
  9. Lawless, Martina, 2007. "Firm Export Dynamics and the Geography of Trade," MPRA Paper 10008, University Library of Munich, Germany.
  10. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2008. "An Anatomy of International Trade: Evidence from French Firms," NBER Working Papers 14610, National Bureau of Economic Research, Inc.
  11. Jonathan Eaton, Marcela Eslava, Maurice Kugler,James Tybout, 1970. "Export Dynamics in Colombia: Firm-Level Evidence," Working Papers eg0036, Wilfrid Laurier University, Department of Economics, revised 1970.
  12. Dixit, A., 1988. "Entry And Exit Decisions Under Uncertainty," Papers 91, Princeton, Department of Economics - Financial Research Center.
  13. Antoine Berthou & Lionel Fontagné, 2013. "How do Multiproduct Exporters React to a Change in Trade Costs?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 326-353, 04.
  14. Nicolas Berman & Antoine Berthou & Jérôme Héricourt, 2011. "Export Dynamics and Sales at Home," Working Papers 2011-33, CEPII research center.
  15. Richard Baldwin & Paul R. Krugman, 1986. "Persistent Trade Effects of Large Exchage Rate Shocks," NBER Working Papers 2017, National Bureau of Economic Research, Inc.
  16. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market entry costs, producer heterogeneity and export dynamics," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 03-10, Indian Statistical Institute, New Delhi, India.
  17. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  18. Albornoz, Facundo & Calvo Pardo, Héctor F. & Corcos, Gregory & Ornelas, Emanuel, 2012. "Sequential exporting," Journal of International Economics, Elsevier, vol. 88(1), pages 17-31.
  19. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "Uncertainty and entry into export markets," Banco de Espa�a Working Papers 0811, Banco de Espa�a.
  20. Josep M Vilarrubia & Rubén Segura-Cayuela, 2008. "Uncertainty and entry into export markets," 2008 Meeting Papers 661, Society for Economic Dynamics.
  21. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
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