The Rise of Exporting by U.S. Firms

In this note, we summarize the motivation and results of Lincoln and McCallum (2015), which investigates the factors supporting globalization by focusing on the experience of the United States.3 Along with the well-known expansion of export volumes, we document a significant increase in the prevalence of U.S. firms selling abroad. Using a firm level dataset and empirical model to identify the key determinants of U.S. firms' participation in export markets, we uncover that the development of the internet, new trade agreements, and growth in foreign income were important forces behind increased export participation. Declines in barriers to entry, exchange rate movements, and the fall of the Soviet Union, in contrast, all played small roles. In so doing, we provide a better understanding of the factors giving impetus to the recent increase in globalization.