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The Twin Peaks of the Export Intensity Distribution

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  • Fabrice Defever
  • Alejandro Riaño

Abstract

Received wisdom suggests that most exporters sell most of their output domestically. We show, however, that the distribution of export intensity varies substantially across countries and is often bimodal, displaying “twin peaks”—that is, large shares of both low- and high-intensity exporters coexisting alongside each other within a country. We reconcile this new stylized fact with an otherwise standard model of trade in which firms face firm-destination-specific revenue shifters that follow a lognormal distribution with sufficiently high dispersion. We structurally estimate the model and show that differences in countries’ size relative to the rest of the world can account for most of the observed cross-country variation in the distribution of export intensity in our data. While policies that incentivize firms to export a high share of their output account for a substantial share of the variation in the dispersion of firm-destination revenue shifters, they cannot fully account for the widespread prevalence of twin peaks around the world.

Suggested Citation

  • Fabrice Defever & Alejandro Riaño, 2022. "The Twin Peaks of the Export Intensity Distribution," Journal of the European Economic Association, European Economic Association, vol. 20(3), pages 1347-1394.
  • Handle: RePEc:oup:jeurec:v:20:y:2022:i:3:p:1347-1394.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvac006
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    1. Beata Javorcik & Steven Poelhekke, 2017. "Former Foreign Affiliates: Cast Out and Outperformed?," Journal of the European Economic Association, European Economic Association, vol. 15(3), pages 501-539.
    2. Defever, Fabrice & Reyes, José-Daniel & Riaño, Alejandro & Varela, Gonzalo, 2020. "All these worlds are yours, except india: The effectiveness of cash subsidies to export in nepal," European Economic Review, Elsevier, vol. 128(C).
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    Cited by:

    1. Shokhrukh Khasanov & Masato Hiwatari, 2025. "Firm productivity and manufacturing exports in transition economies: An institutional and trade geography perspective," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-30, February.
    2. Doungdao Mahakitsiri & Wisarut Suwanprasert, 2023. "Who are pure exporters?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1759-1781, June.
    3. Defever, Fabrice & Riaño, Alejandro, 2022. "Firm-destination heterogeneity and the distribution of export intensity," Economics Letters, Elsevier, vol. 219(C).

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