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Twin Peaks

Author

Listed:
  • Alejandro Riaño

    (University of Nottingham)

  • Fabrice Defever

    (City University of London and CEP)

Abstract

This paper highlights a new stylized fact by documenting a great degree of heterogeneity in the distribution of export intensity across countries. Contrary to received wisdom from studies focusing on a single country, we show that export intensity distributions tend to exhibit modes at both ends of the support, a phenomenon that we refer to as `twin peaks'. Using a standard trade model with rm-destination specificc demand shifters we show that i) this feature directly results from heavy-tailed sale distributions ii) this feature (statistically) vanish for countries with large or small domestic market compared to their export market. Using publicly available firm-level data, we show that the model's structural parameters are easily estimated and can account for approximately 89 percent of cross-country variation in the distribution of export intensity. Our finding have many applications, notably with regards to volatility of firm's sales.

Suggested Citation

  • Alejandro Riaño & Fabrice Defever, 2017. "Twin Peaks," 2017 Meeting Papers 454, Society for Economic Dynamics.
  • Handle: RePEc:red:sed017:454
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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