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A search and learning model of export dynamics

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  • Eaton, Jonathan
  • Eslava, Marcela
  • Jinkins, David
  • Krizan, C.J.
  • Tybout, James

Abstract

Exporting is harder than selling at home, and overcoming barriers takes time. We identify key obstacles to exporting and measure their importance by developing a model of firm-level export dynamics with costly customer search, visibility effects, and learning about product appeal. Fitting the model to U.S. import data on Colombian manufactures, we replicate patterns of exporter maturation. A firm’s customer base and market knowledge are valuable intangible assets: losing both through “market amnesia” would cost Colombian exporters US$14.2 billion, over twice annual exports to the U.S. About a quarter of this reflects lost future sales to current customers; the rest stems from the cost of relearning product appeal and regaining visibility. The frictions we estimate slow trade’s response to shocks: the 10-year export sales response to an exchange rate shock is 48 percent larger than the 1-year response.

Suggested Citation

  • Eaton, Jonathan & Eslava, Marcela & Jinkins, David & Krizan, C.J. & Tybout, James, 2025. "A search and learning model of export dynamics," Journal of International Economics, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:inecon:v:157:y:2025:i:c:s0022199625001126
    DOI: 10.1016/j.jinteco.2025.104155
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