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On Export Duration Puzzles

Author

Listed:
  • Wendkouni Jean‐baptiste Zongo

    (Université de Ouahigouya, Laval University, Quebec, Canada, Agriculture and Agri-Food Canada)

  • Bruno Larue

    (Laval University, Quebec, Canada)

  • Carl Gaigné

    (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, Laval University, Quebec, Canada)

Abstract

We investigate two puzzles in the export duration literature. The first puzzle has to do with the frequent entries and exits of firms in export markets, which are at odds with the large fixed export costs in such markets. We introduce convex production technologies in a trade model to show how variable marginal costs create direct linkages between export markets. As fixed export costs vary across destinations, more productive firms need not necessarily export to more destinations. Cost convexity implies that the probability of supplying a given export market is adversely affected by positive export shocks in other markets. This is supported by our empirical analysis of bilateral flows for over 200 agri‐food products to 176 destinations originating from six large exporting countries. The second puzzle has to do with the paradoxical effect of tariffs reported in empirical export duration studies. When endogeneity is addressed, tariffs increase the probability of an export failure.

Suggested Citation

  • Wendkouni Jean‐baptiste Zongo & Bruno Larue & Carl Gaigné, 2023. "On Export Duration Puzzles," Post-Print hal-05584324, HAL.
    • Handle: RePEc:hal:journl:hal-05584324
    DOI: 10.1111/ajae.12321
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    Cited by:

    1. is not listed on IDEAS
    2. Bruno Larue & Alan P. Ker, 2024. "Climate change, production and trade in apples," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 72(3), pages 325-346, September.
    3. Zohra Bouamra-Mechemache & Carl Gaigné & Stéphane Turolla, 2025. "On the Promotion of Domestic Food Industry. Quantifying the Effects of Reducing Labor Cost and Upgrading Quality [Promouvoir les industries agroalimentaires domestiques : Evaluer les effets de la diminution du coût du travail et de la montée en ga," Working Papers hal-05067193, HAL.
    4. Jamali Jaghdani, Tinoush & Johansen, Ulf & Thakur, Maitri & Glauben, Thomas, 2024. "Salmon trade duration: The application of firm‐level trade transaction data from the Norwegian salmon industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 40(2), pages 325-348.

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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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