IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03700851.html

The Twin Peaks of the Export Intensity Distribution

Author

Listed:
  • Fabrice Defever

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - ULCO - Université du Littoral Côte d'Opale - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Alejandro Riaño

    (City University of London)

Abstract

Received wisdom suggests that most exporters sell most of their output domestically. We show, however, that the distribution of export intensity varies substantially across countries and is often bimodal, displaying "twin peaks"—that is, large shares of both low- and high-intensity exporters coexisting alongside each other within a country. We reconcile this new stylized fact with an otherwise standard model of trade in which firms face firm-destination-specific revenue shifters that follow a lognormal distribution with sufficiently high dispersion. We structurally estimate the model and show that differences in countries' size relative to the rest of the world can account for most of the observed cross-country variation in the distribution of export intensity in our data. While policies that incentivize firms to export a high share of their output account for a substantial share of the variation in the dispersion of firm-destination revenue shifters, they cannot fully account for the widespread prevalence of twin peaks around the world.

Suggested Citation

  • Fabrice Defever & Alejandro Riaño, 2022. "The Twin Peaks of the Export Intensity Distribution," Post-Print hal-03700851, HAL.
  • Handle: RePEc:hal:journl:hal-03700851
    DOI: 10.1093/jeea/jvac006
    Note: View the original document on HAL open archive server: https://hal.science/hal-03700851v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-03700851v1/document
    Download Restriction: no

    File URL: https://libkey.io/10.1093/jeea/jvac006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Defever, Fabrice & Reyes, José-Daniel & Riaño, Alejandro & Varela, Gonzalo, 2020. "All these worlds are yours, except india: The effectiveness of cash subsidies to export in nepal," European Economic Review, Elsevier, vol. 128(C).
    2. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, September.
    3. Pinelopi K. Goldberg & Nina Pavcnik, 2016. "The Effects of Trade Policy," NBER Working Papers 21957, National Bureau of Economic Research, Inc.
    4. Robert C. Feenstra & Gordon H. Hanson, 2005. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 729-761.
    5. Beata Javorcik & Steven Poelhekke, 2017. "Former Foreign Affiliates: Cast Out and Outperformed?," Journal of the European Economic Association, European Economic Association, vol. 15(3), pages 501-539.
    6. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    7. Martina Lawless & Karl Whelan, 2014. "Where Do Firms Export, How Much and Why?," The World Economy, Wiley Blackwell, vol. 37(8), pages 1027-1050, August.
    8. Dai, Mi & Maitra, Madhura & Yu, Miaojie, 2016. "Unexceptional exporter performance in China? The role of processing trade," Journal of Development Economics, Elsevier, vol. 121(C), pages 177-189.
    9. Manova, Kalina & Yu, Zhihong, 2016. "How firms export: Processing vs. ordinary trade with financial frictions," Journal of International Economics, Elsevier, vol. 100(C), pages 120-137.
    10. Nigai, Sergey, 2017. "A tale of two tails: Productivity distribution and the gains from trade," Journal of International Economics, Elsevier, vol. 104(C), pages 44-62.
    11. Alessandria, George & Avila, Oscar, 2020. "Trade Integration in Colombia: A Dynamic General Equilibrium Study with New Exporter Dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 115(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shokhrukh Khasanov & Masato Hiwatari, 2025. "Firm productivity and manufacturing exports in transition economies: An institutional and trade geography perspective," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-30, February.
    2. Defever, Fabrice & Riaño, Alejandro, 2022. "Firm-destination heterogeneity and the distribution of export intensity," Economics Letters, Elsevier, vol. 219(C).
    3. Doungdao Mahakitsiri & Wisarut Suwanprasert, 2023. "Who are pure exporters?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1759-1781, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabrice Defever & Alejandro Riano, 2017. "Twin peaks," Discussion Papers 2017-15, University of Nottingham, GEP.
    2. Deng, Jianpeng & Wang, Zi, 2025. "The costs of duty exemptions in processing trade," China Economic Review, Elsevier, vol. 94(PB).
    3. Julien Gourdon & Laura Hering & Stéphanie Monjon & Sandra Poncet, 2022. "Estimating the repercussions from China's export value‐added tax rebate policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(1), pages 243-277, January.
    4. Fabrice Defever & Alejandro Riaño, 2017. "China’s Dual Export Sector," Discussion Papers 2017-01, University of Nottingham, GEP.
    5. Defever, Fabrice & Riaño, Alejandro, 2022. "Firm-destination heterogeneity and the distribution of export intensity," Economics Letters, Elsevier, vol. 219(C).
    6. Brandt, Loren & Li, Bingjing & Morrow, Peter M., 2021. "Processing trade and costs of incomplete liberalization: The case of China," Journal of International Economics, Elsevier, vol. 131(C).
    7. Van Assche, Ari & Van Biesebroeck, Johannes, 2018. "Functional upgrading in China's export processing sector," China Economic Review, Elsevier, vol. 47(C), pages 245-262.
    8. Zhiyuan Chen & Aksel Erbahar & Yuan Zi, 2019. "Made and Created in China: Super Processors and Two-way Heterogeneity," Tinbergen Institute Discussion Papers 19-080/VI, Tinbergen Institute.
    9. Hu, Zhongzhong & Rodrigue, Joel & Tan, Yong & Yu, Chunhai, 2017. "Product churning, reallocation, and Chinese export growth," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 147-164.
    10. Zhiyuan Chen & Aksel Erbahar & Yuan Zi, 2025. "Made and created in China: the role of processing trade," Scandinavian Journal of Economics, Wiley Blackwell, vol. 127(2), pages 390-426, April.
    11. Jeffrey H. Bergstrand & Stephen R. Cray & Antoine Gervais, 2023. "Increasing Marginal Costs, Firm Heterogeneity,and the Gains from "Deep" International Trade Agreements," Cahiers de recherche 23-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    12. Li, Jie & Ouyang, Zhigang & Zhang, Naixin, 2023. "Processing trade and credit constraints," Journal of Corporate Finance, Elsevier, vol. 83(C).
    13. Miaojie Yu, 2020. "China-US Trade War and Trade Talk," Springer Books, Springer, number 978-981-15-3785-1, January.
    14. Julien Gourdon & Laura Hering & Stéphanie Monjon & Sandra Poncet, 2022. "Estimating the Repercussions from China’s Export VAT Rebate Policy," Post-Print hal-03274542, HAL.
    15. Tian, Wei & Yu, Miaojie, 2020. "Distribution, outward FDI, and productivity heterogeneity: China and cross-countries’ evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 67(C).
    16. John Chung, 2025. "Firm Heterogeneity, Misallocation, and Trade," Working Papers 25-33, Center for Economic Studies, U.S. Census Bureau.
    17. Larry Qiu & Miaojie Yu, 2014. "Multiproduct Firms, Export Product Scope, and Trade Liberalization: The Role of Managerial Efficiency," Working Papers 022014, Hong Kong Institute for Monetary Research.
    18. Van Assche, Ari & Van Biesebroeck, Johannes, 2017. "Functional Upgrading in China’s Export Processing Sector," CEPR Discussion Papers 11967, Centre for Economic Policy Research.
    19. Bergstrand, Jeffrey H. & Cray, Stephen R. & Gervais, Antoine, 2023. "Increasing marginal costs, firm heterogeneity, and the gains from “deep” international trade agreements," Journal of International Economics, Elsevier, vol. 144(C).
    20. Bo Gao & Mich Tvede, 2017. "The Impact of Trade with Pure Exporters," Department of Economics Working Papers 2017_05, Durham University, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-03700851. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.