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Export Dynamics in Colombia: Transactions Level Evidence

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  • Jonathan Eaton

    ()

  • Marcela Eslava

    ()

  • Maurice Kugler

    ()

  • James Tybout

    ()

Abstract

We examine Colombian export transaction data from customs records in several dimensions. We begin with some basic statistics on the number and frequency of export transactions by a firm, overall and across individual markets. We then decompose the variation in overall exports into the number of transactions and the size of the average transaction, both at the aggregate level and for individual firms to explore gravity equations, where the patterns of exports and numbers of transactions are related to the distance with respect to the destination. The analysis is carried out both at the aggregate and the firm level. Then we explore the relationship between patterns of transactions numbers and shipment modes. Our results show great heterogeneity in the patterns of frequency and number of transactions across firms; the average firm sent about 75 shipments abroad in 2005, while the firm with largest number of transactions that same year dispatched more than 26,000 shipments. Moreover, while close to 35% of firms in the sample report a single export transaction over the period, for most firms with multiple transactions the average span between two transactions is less than a month. Part of this heterogeneity is shown to be related to the distance with respect to the destination market: firms exporting to more distant destinations make less frequent shipments than firms exporting to markets that are closer. This suggests that there are fixed costs per shipment inducing declining marginal cost of higher shipment volume. These patterns imply that, at the aggregate level, transactions numbers are the primary source of variation in exports. The variability in the numbers of transactions also explains an important part of the well-known negative relationship between aggregate exports and distance to a specific destination.

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Bibliographic Info

Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 522.

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Handle: RePEc:bdr:borrec:522

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Keywords: Export transaction frequency; fixed shipment costs and scale economies in transportation; destination distance; average shipment volume and number of shipments. Classification JEL: F10; F12; F14.;

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References

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  1. Erzo G. J. Luttmer, 2007. "Selection, Growth, and the Size Distribution of Firms," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1103-1144, 08.
  2. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
  3. Maurice Kugler, 2006. "Spillovers From Foreign Direct Investment:Within Or Between Industries?," BORRADORES DE ECONOMIA 003523, BANCO DE LA REPÚBLICA.
  4. Rauch, J E & Watson, Joel, 1999. "Starting Small in an Unfamiliar Environment," University of California at San Diego, Economics Working Paper Series qt4rp145hc, Department of Economics, UC San Diego.
  5. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, 09.
  6. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market Entry Costs, Producer Heterogeneity, and Export Dynamics," NBER Working Papers 8629, National Bureau of Economic Research, Inc.
  7. Andrew B Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and productivity in international trade," Working Papers 00-08, Center for Economic Studies, U.S. Census Bureau.
  8. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  9. 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.
  10. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2004. "The effects of structural reforms on productivity and profitability enhancing reallocation: Evidence from Colombia," Economics Working Papers 763, Department of Economics and Business, Universitat Pompeu Fabra.
  11. Costas Arkolakis, 2010. "Market Penetration Costs and the New Consumers Margin in International Trade," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1151 - 1199.
  12. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  13. Tibor Besedes, . "A Search Cost Perspective on Duration of Trade," Departmental Working Papers 2006-12, Department of Economics, Louisiana State University.
  14. 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.
  15. Luca David Opromolla & Alfonso Irarrazabal, 2005. "Hysteresis in Export Markets," International Trade 0512003, EconWPA.
  16. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
  17. Brooks, Eileen L., 2006. "Why don't firms export more? Product quality and Colombian plants," Journal of Development Economics, Elsevier, vol. 80(1), pages 160-178, June.
  18. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
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Citations

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Cited by:
  1. Rodrigo Wagner & Andrés Zahler, 2011. "New Exports from Emerging Markets:Do Followers Beneit from Pioneers ?," Working Papers 18, Facultad de Economía y Empresa, Universidad Diego Portales.
  2. Ariu, Andrea, 2012. "Services Versus Goods Trade: Are They The Same?," CEPR Discussion Papers 9036, C.E.P.R. Discussion Papers.
  3. Sandra PONCET & Felipe STAROSTA DE WALDEMAR, 2012. "Product relatedness and firm exports in China," Working Papers P58, FERDI.
  4. Cebeci, Tolga & Fernandes, Ana M. & Freund, Caroline & Pierola, Martha Denisse, 2012. "Exporter dynamics database," Policy Research Working Paper Series 6229, The World Bank.
  5. Macchiavello, Rocco, 2010. "Development Uncorked: Reputation Acquisition in the New Market for Chilean Wines in the UK," CEPR Discussion Papers 7698, C.E.P.R. Discussion Papers.
  6. Freund, Caroline & Pierola, Martha Denisse, 2012. "Export surges," Journal of Development Economics, Elsevier, vol. 97(2), pages 387-395.
  7. Molina, Danielken & Roa, Monica, 2014. "The Effect of Credit on the Export Performance of Colombian Exporters," MPRA Paper 56137, University Library of Munich, Germany.

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