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An Anatomy of International Trade : Evidence from French Firms” ~We examine the sales of French manufacturing ?rms in 113 destinations, including Franceitself. Several regularities stand out: (1) the number of French ?rms selling to a market, rela-tive to French market share, increases systematically with market size; (2) sales distributionsare very similar across markets of very di¤erent size and extent of French participation; (3)average sales in France rise very systematically with selling to less popular markets and tomore markets. We adopt a model of ?rm heterogeneity and export participation which weestimate to match moments of the French data using the method of simulated moments. Theresults imply that nearly half the variation across ?rms that we see in market entry can beattributed to a single dimension of underlying ?rm heterogeneity, e¢ ciency. Conditional onentry, underlying e¢ ciency accounts for a much smaller variation in sales in any given market.Parameter estimates imply that ?xed costs eat up a little more than half of gross pro?ts. Weuse our results to simulate the e¤ects of a counterfactual decline in bilateral trade barriers onFrench ?rms. While total French sales rise by around US$16 billion, sales by the top decileof ?rms rise by nearly US$23 billion. Every lower decile experiences a drop in sales, due toselling less at home or exiting altogether. ~75 ~2008 ~ ~Application/pdf ~ Crest working paper version ~2008-29 ~~Optimal Matching

  • Jonathan EATON, Samuel KORTUM, Francis KRAMARZ


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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2008-29.

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Date of creation: 2008
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Handle: RePEc:crs:wpaper:2008-29
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