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Pure Exporter: Theory and Evidence

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  • Jiangyong, Lu
  • Yi, Lu
  • Zhigang, Tao

Abstract

This paper provides the first evidence about pure exporters (i.e., firms exporting all of their output to the foreign market) -- a phenomenon overlooked and cannot be explained in the existing literature. It then offers a generalized model of Melitz (2003) for examining the existence and behavior of pure exporters. In particular, pure exporters arise when the export market is sufficiently large -- a situation more likely to hold in developing countries as opposed to large developed countries; and their productivity levels are above those of non-exporters, but below those of firms having both domestic sales and export. These theoretical predictions are borne out in a data of Chinese manufacturing firms for the period of 1998-2005.

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File URL: http://mpra.ub.uni-muenchen.de/29966/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29966.

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Date of creation: Mar 2011
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Handle: RePEc:pra:mprapa:29966

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Related research

Keywords: Pure Exporter; Firm Heterogeneity; Exporting Behavior;

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References

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  1. McMillan, John & Woodruff, Christopher, 1998. "Inter-Firm Relationships and Informal Credit in Vietnam," CEPR Discussion Papers 2036, C.E.P.R. Discussion Papers.
  2. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning By Exporting Important? Micro-Dynamic Evidence From Colombia, Mexico, And Morocco," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 903-947, August.
  3. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  4. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
  5. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  6. 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.
  7. Lu, Jiangyong & Lu, Yi & Tao, Zhigang, 2010. "Exporting behavior of foreign affiliates: Theory and evidence," Journal of International Economics, Elsevier, vol. 81(2), pages 197-205, July.
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Cited by:
  1. Fabrice Defever & Alejandro Riaño, 2013. "China's Pure Exporter Subsidies," FIW Working Paper series 121, FIW.
  2. Fabrice Defever & Alejandro Riaño, 2012. "China's pure exporter subsidies," LSE Research Online Documents on Economics 48929, London School of Economics and Political Science, LSE Library.

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