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Entry, Expansion, and Intensity in the U.S. Export Boom, 1987-1992

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  • Andrew B Bernard
  • J Bradford Jensen

Abstract

U.S. exports grew at a rate of 10.3% per year from 1987-1992, far faster than the economy as a whole and faster than in any other five year period since 1960. This paper examines the sources of the export boom considering the role of entry, firm expansion and export intensity. The preponderance of the increase in exports came from increasing export intensity at existing exporters rather than from new entry into exporting. The small role of entry relative to export intensity offers support for the importance of sunk costs in the export market. In addition, we consider competing explanations for the rise in exports using a comprehensive plant level data set. Changes in exchange rates and rises in foreign income were the dominant sources for the export increase, while productivity increases in U.S. plants played a relatively small role.

Suggested Citation

  • Andrew B Bernard & J Bradford Jensen, 2001. "Entry, Expansion, and Intensity in the U.S. Export Boom, 1987-1992," Working Papers 01-09, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:01-09
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    References listed on IDEAS

    as
    1. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-785, September.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Richard Baldwin & Paul Krugman, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 635-654.
    4. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
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    6. Andrew B. Bernard & J. Bradford Jensen, 1995. "Exporters, Jobs, and Wages in U.S. Manufacturing: 1976-1987," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995 Micr), pages 67-119.
    7. Avinash Dixit, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, Oxford University Press, vol. 104(2), pages 205-228.
    8. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    Full references (including those not matched with items on IDEAS)

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