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Exports, investment and firm-level sales volatility

Listed author(s):
  • Alejandro Riaño

    ()

This paper presents a dynamic model of risk-averse producers’ decision to invest in physical capital and to export. The model features irreversible investment, no capital markets and fixed and sunk costs to export. Several features of the distribution of investment rates and export participation patterns observed in firm-level data are closely matched in a calibration exercise. Counterfactual experiments show that large adjustments in total sales associated with entry into foreign markets increase the volatility of total sales for exporting firms.

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File URL: http://hdl.handle.net/10.1007/s10290-011-0104-z
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Article provided by Springer & Institut für Weltwirtschaft (Kiel Institute for the World Economy) in its journal Review of World Economics.

Volume (Year): 147 (2011)
Issue (Month): 4 (November)
Pages: 643-663

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Handle: RePEc:spr:weltar:v:147:y:2011:i:4:p:643-663
DOI: 10.1007/s10290-011-0104-z
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