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The Buyer Margins of Firms' Exports

Author

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  • Jerónimo Carballo
  • Gianmarco I. P. Ottaviano
  • Christian Volpe Martincus

Abstract

We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that aggregate exports are disproportionally driven by few multi-buyers exporters whose foreign sales of any product are in turn accounted for by few dominant buyers. We propose an analytically solvable multi-country model of endogenous selection in which dominant exporters, dominant products and dominant buyers emerge in parallel as multi-product sellers with heterogeneous technologies compete for buyers with heterogeneous needs. The model not only provides an explanation of the existence of dominant buyers but also makes specific predictions on how the relative importance of dominant buyers should vary across export destinations depending on their market size and accessibility. We show that these predictions are borne out by our data and discuss their welfare implications in terms of gains from trade.

Suggested Citation

  • Jerónimo Carballo & Gianmarco I. P. Ottaviano & Christian Volpe Martincus, 2013. "The Buyer Margins of Firms' Exports," CEP Discussion Papers dp1234, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1234
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    Citations

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    Cited by:

    1. Volpe Martincus, Christian & Carballo, Jerónimo & Graziano, Alejandro, 2015. "Customs," Journal of International Economics, Elsevier, vol. 96(1), pages 119-137.
    2. Defever, Fabrice & Fischer, Christian & Suedekum, Jens, 2016. "Relational contracts and supplier turnover in the global economy," Journal of International Economics, Elsevier, vol. 103(C), pages 147-165.
    3. Kamal, Fariha & Sundaram, Asha, 2016. "Buyer–seller relationships in international trade: Do your neighbors matter?," Journal of International Economics, Elsevier, vol. 102(C), pages 128-140.
    4. Araujo, Luis & Mion, Giordano & Ornelas, Emanuel, 2016. "Institutions and export dynamics," Journal of International Economics, Elsevier, vol. 98(C), pages 2-20.
    5. Volpe Martincus, Christian & Carballo, Jerónimo & Graziano, Alejandro, 2015. "Customs," Journal of International Economics, Elsevier, vol. 96(1), pages 119-137.
    6. Fabrice Defever & Christian Fischer & Jens Suedekum, 2017. "Supplier Search and Rematching in Global Sourcing - Theory and Evidence from China," CESifo Working Paper Series 6748, CESifo Group Munich.
    7. M. Scott Taylor, "undated". "Trade and the Environment: New Methods, Measurements, and Results NBER Working Paper No. 22636," Working Papers 2016-46, Department of Economics, University of Calgary, revised 01 Dec 2016.
    8. Andrea Ariu & Elena Biewen & Sven Blank & Guillaume Gaulier & María Jesus González, & Philipp Meinen, & Daniel Mirza & Cesar Martín, & Patry Tello, 2017. "Firm heterogeneity and aggregate business services exports : Micro evidence from Belgium, France, Germany and Spain," Working Paper Research 328, National Bank of Belgium.
    9. Defever, F. & Fischer, C. & Suedekum, J., 2017. "Supplier Search and Re-matching in Global Sourcing - Theory and Evidence from China," Working Papers 17/03, Department of Economics, City University London.
    10. repec:eee:inecon:v:111:y:2018:i:c:p:122-133 is not listed on IDEAS

    More about this item

    Keywords

    Firm heterogeneity; taste heterogeneity; import-export relations; competition; selection;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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