Pure Exporter: Theory and Evidence

Jiangyong, Lu and Yi, Lu and Zhigang, Tao (2011): Pure Exporter: Theory and Evidence.

Abstract

This paper provides the first evidence about pure exporters (i.e., firms exporting all of their output to the foreign market) -- a phenomenon overlooked and cannot be explained in the existing literature. It then offers a generalized model of Melitz (2003) for examining the existence and behavior of pure exporters. In particular, pure exporters arise when the export market is sufficiently large -- a situation more likely to hold in developing countries as opposed to large developed countries; and their productivity levels are above those of non-exporters, but below those of firms having both domestic sales and export. These theoretical predictions are borne out in a data of Chinese manufacturing firms for the period of 1998-2005.

• Item Type: MPRA Paper
• Language: English
• Keywords: Pure Exporter, Firm Heterogeneity, Exporting Behavior
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

References

Bernard, A. B. and J. B. Jensen (1999). "Exceptional Exporter Performance: Cause, Effect, or Both?" Journal of International Economics 47(1): 1-25.

Clerides, S. K., S. Lach, and J. R. Tybout (1998). "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco." Quarterly Journal of Economics 113(3): 903-947.

Levinsohn, J. and A. Petrin (2003). "Estimating Production Functions Using Inputs to Control for Unobservables." Review of Economic Studies 70(2): 317-342.

Lu, J., Y. Lu, and Z. Tao (2010). "Exporting Behavior of Foreign Affiliates: Theory and Evidence." Journal of International Economics 81: 197-205.

McMillan, J. and C. Woodruff (1999). "Interfirm Relationships And Informal Credit In Vietnam." Quarterly Journal of Economics 114(4): 1285-1320.

Melitz, M. J. (2003). "The Impact of Trade on Intra-industry Reallocations and Aggregate Industry Productivity." Econometrica 71(6): 1695-1725.

Olley, G.S. and A. Pakes (1996). "The Dynamics of Productivity in the Telecommunications Equipment Industry." Econometrica 64: 1263-1297.

Van Biesebroeck, J. (2007). "Robustness of Productivity Estimates." Journal of Industrial Economics 55(3): 529-569.