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Economies Of Scale And The Size Of Exporters

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  • Roc Armenter
  • Miklós Koren

Abstract

How important are economies of scale in exporting? We argue that firm size cannot be the main determinant of export status if a model is to be consistent with the observed number and size of exporters. Instead, we need a lot of variation independent of firm size to reconcile the model with the data. We show that the augmented model also has markedly different implications regarding the margin of adjustment in the event of a trade liberalization: most of the adjustment is through the intensive margin and productivity gains due to reallocation are halved.

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  • Roc Armenter & Miklós Koren, 2015. "Economies Of Scale And The Size Of Exporters," Journal of the European Economic Association, European Economic Association, vol. 13(3), pages 482-511, June.
  • Handle: RePEc:bla:jeurec:v:13:y:2015:i:3:p:482-511
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    Cited by:

    1. Thomas Chaney, 2014. "The Network Structure of International Trade," American Economic Review, American Economic Association, vol. 104(11), pages 3600-3634, November.
    2. Alessia Lo Turco & Daniela Maggioni, 2017. "“Glocal” ties: banking development and SEs’ export entry," Small Business Economics, Springer, vol. 48(4), pages 999-1020, April.
    3. Gormsen, Christian, 2009. "Intransparent Markets and Intra-Industry Trade," Working Papers 09-20, University of Aarhus, Aarhus School of Business, Department of Economics.
    4. Andreas Hatzigeorgiou & Magnus Lodefalk, 2016. "Migrants’ Influence on Firm-level Exports," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 477-497, December.
    5. Gregory Corcos & Massimo Del Gatto & Giordano Mion & Gianmarco I.P. Ottaviano, 2012. "Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade," Economic Journal, Royal Economic Society, vol. 122(561), pages 754-798, June.
    6. Andrea Caggese & Vicente Cunat, 2013. "Financing Constraints, Firm Dynamics, Export Decisions, and Aggregate Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 177-193, January.
    7. Cherkashin, Ivan & Demidova, Svetlana & Kee, Hiau Looi & Krishna, Kala, 2015. "Firm heterogeneity and costly trade: A new estimation strategy and policy experiments," Journal of International Economics, Elsevier, vol. 96(1), pages 18-36.
    8. Holger Breinlich & Alejandro Cuñat, 2016. "Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models," Economic Journal, Royal Economic Society, vol. 126(595), pages 1660-1702, September.
    9. Juan Carlos Hallak & Jagadeesh Sivadasan, 2009. "Firms' Exporting Behavior under Quality Constraints," NBER Working Papers 14928, National Bureau of Economic Research, Inc.
    10. Tomasz Serwach, 2012. "Why Learning by Exporting May Not Be As Common As You Think and What It Means for Policy," International Journal of Management, Knowledge and Learning, International School for Social and Business Studies, Celje, Slovenia, vol. 1(2), pages 157-172.
    11. Breinlich, Holger & Nocke, Volker & Schutz, Nicolas, 2017. "International aspects of merger policy: A survey," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 415-429.
    12. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    13. Alejandro Riaño, 2011. "Exports, investment and firm-level sales volatility," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 643-663, November.
    14. Holger Breinlich & Alejandro Cuñat, 2010. "Trade Liberalization and Heterogeneous Firm Models: An Evaluation Using the Canada - US Free Trade Agreement," CEP Discussion Papers dp0975, Centre for Economic Performance, LSE.
    15. Curzi, Daniele & Olper, Alessandro, 2012. "Export behavior of Italian food firms: Does product quality matter?," Food Policy, Elsevier, vol. 37(5), pages 493-503.
    16. de Sousa, José & Disdier, Anne-Célia & Gaigné, Carl, 2015. "Export decision under risk," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205584, Agricultural and Applied Economics Association.
    17. Federico Esposito, 2016. "Risk Diversification and International Trade," 2016 Meeting Papers 302, Society for Economic Dynamics.
    18. Armenter, Roc, 2014. "Does the U.S. trade more widely than it appears?," Business Review, Federal Reserve Bank of Philadelphia, issue 1, pages 1-8.
    19. Alessia LO TURCO & Daniela MAGGIONI, 2016. "For God's sake. The impact of religious proximity on firms' exports," Working Papers 418, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    20. Lindenthal, Volker, 2018. "The Volatility and Cyclicality of Job Flows in German Exporters and Non-Exporters," Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181637, Verein für Socialpolitik / German Economic Association.

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