Firm Export Dynamics and the Geography of Trade

Lawless, Martina (2007): Firm Export Dynamics and the Geography of Trade.

Abstract

Two recent trends in international economics have been an increased focus on the geography of trade (e.g. what factors determine where a country exports to) and the emergence of empirical work examining firm-level data on exporting activity. However, data limitations have prevented there being much progress in combining these two areas, because very few countries provide firm-level data breaking down firm exports by their destination. Eaton, Kortum and Kramarz (2004) have analysed such data for French frms but their study only uses a single cross-section of data. This paper uses a unique survey of Irish exporting firms over a five year period to fill some of the gaps in this empirical literature. With information on over fifty destinations, firm-level changes in market coverage and their contribution to net export growth are investigated. Firm involvement in individual export markets is found to be much more dynamic than export status. Entry and exit to markets is shown to be a quantifiably important component of overall export ows, with this factor becoming more important for less popular markets. The paper also shows how the patterns of entry and exit into export markets combine to determine the overall firm-level distribution of number of markets entered.

• Item Type: MPRA Paper
• Language: English
• Keywords: Firm exports; market entry and exit; transition matrix
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

References

Bernard, Andrew B. and J. Bradford Jensen (1995). "Exporters, Jobs and Wages in US Manufacturing: 1976-1987" Brookings Papers on Economic Activity: Microeconomics Vol. 1995, pp. 67-112

Bernard, Andrew B. and J. Bradford Jensen (2004). "Entry, Expansion and Intensity in the US Export Boom, 1987-1992," Review of International Economics 12(4), pp.662-675

Bernard, Andrew B., J. Bradford Jensen and Peter K. Schott (2005). "Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods," NBER Working Paper No.11404

Bernard, Andrew B., Jonathan Eaton, J. Bradford Jensen and Samuel Kortum (2003). "Plants and Productivity in International Trade," American Economic Review, Vol. 93, No.4, pp. 1268-1290

Bernard, Andrew B. and Joachim Wagner (2001). "Export Entry and Exit by German Firms," Review of World Economics Vol. 137, No.1

Central Statistics Office (2000-2004). Census of Industrial Production, Dublin

Chaney, Thomas (2005a). "Distorted Gravity: Heterogeneous Firms, Market Structure and the Geography of International Trade" mimeo, University of Chicago

Chaney, Thomas (2005b). "Liquidity Constrained Exporters" mimeo, University of Chicago

Davis, Steven, John Haltiwanger and Scott Schuh (1996). Job Creation and Destruction, Cambridge, MIT Press

Eaton, Jonathan and Zvi Eckstein (1997). "Cities and Growth: Theory and Evidence from France and Japan" Regional Science and Urban Economics 27, pp. 443-474

Eaton, Jonathan and Samuel Kortum (2002). "Technology, Geography and Trade" Econometrica 70(5) pp. 1741-1779

Eaton, Jonathan, Samuel Kortum and Francis Kramerz (2004). "Dissecting Trade: Firms, Industries and Export Destinations," American Economic Review Vol. 94, No.2, pp. 150-152

Eaton, Jonathan, Samuel Kortum and Francis Kramerz (2005). "An Anatomy of International Trade: Evidence from French Firms", mimeo, New York University

Gleeson, Anne Marie and Frances Ruane (2006). "Export Dynamics in Small Open Economies: Indigenous Irish Manufacturing Exports, 1985-2003" IIIS Discussion Paper No.140/May 2006

Melitz, Marc J. (2003). "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity", Econometrica Vol. 71, No.6, pp. 1695-1725

Quah, Danny (1993). "Empirical Cross-Section Dynamics in Economic Growth" European Economic Review (37) pp. 426-434

Roberts, Mark J. and James R. Tybout (1997). "The Decision to Export in Columbia: An Empirical Model of Entry with Sunk Costs," American Economic Review Vol. 87, No.4, pp. 545-564

Wagner, Joachim (2003). "On the Micro-Structure of the German Export Boom: Evidence from Establishment Panel Data 1995-2002" HWWA Discussion Paper No.249