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Residual exports and domestic demand: an empirical analysis

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  • Muñoz Sepúlveda, Jesús A.

Abstract

This paper analyzes and quantifies the impact on domestic sales of being an exporter. It is widely assumed that exporters sell in domestic market more than non-exporters, among other important features. However, export participation also slows the growth rates of domestic sales. We will refer to this fall in domestic sales growth as residual export. The empirical analysis uses Spanish microdata provided by the Encuesta Sobre Estrategias Empresariales (ESEE) for the period 1990-2011 in a difference-in-difference model. This method compares domestic sales before and after entry in exporting for two time periods and for two groups of firms: exporters and non-exporters. The results confirm that participation in export activities slows down domestic sales growth significantly, although the amount of this result varies when we distinguish between different types of firms according to their persistence as exporter.

Suggested Citation

  • Muñoz Sepúlveda, Jesús A., 2014. "Residual exports and domestic demand: an empirical analysis," MPRA Paper 54799, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54799
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    File URL: https://mpra.ub.uni-muenchen.de/54799/1/MPRA_paper_54799.pdf
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    References listed on IDEAS

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    1. Esther Gordo & Coral García & Jaime Martínez-Martín, 2008. "Una actualización de las funciones de exportación e importación de la economía española," Boletín Económico, Banco de España;Boletín Económico Homepage, issue DEC, Diciembre.
    2. Eva Ortega & Eva Ferraz & Samuel Hurtado, 2007. "Actualización del modelo trimestral del Banco de España," Boletín Económico, Banco de España;Boletín Económico Homepage, issue JUN, Junio.
    3. JaeBin Ahn & Alexander McQuoid, 2013. "Capacity Constrained Exporters: Micro Evidence and Macro Implications," Working Papers 1301, Florida International University, Department of Economics.
    4. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-660, November.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. Blonigen, Bruce A. & Wilson, Wesley W., 2010. "Foreign subsidization and excess capacity," Journal of International Economics, Elsevier, vol. 80(2), pages 200-211, March.
    7. Ana Buisan & Esther Gordo, 1994. "Funciones de importación y exportación de la economía española," Investigaciones Economicas, Fundación SEPI, vol. 18(1), pages 165-192, January.
    8. Lee, Seung-Hyun & Beamish, Paul W. & Lee, Ho-Uk & Park, Jong-Hun, 2009. "Strategic choice during economic crisis: Domestic market position, organizational capabilities and export flexibility," Journal of World Business, Elsevier, vol. 44(1), pages 1-15, January.
    9. Blum, Bernardo S. & Claro, Sebastian & Horstmann, Ignatius J., 2013. "Occasional and perennial exporters," Journal of International Economics, Elsevier, vol. 90(1), pages 65-74.
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    More about this item

    Keywords

    Residual exports; domestic sales; difference-in-difference model;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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