Caroline L. Freund
World Bank - Middle East and North Africa Region
Martha Denisse Pierola
World Bank - Development Research Group (DECRG)
October 1, 2012
World Bank Policy Research Working Paper No. 6222
This paper shows that the top 1 percent of exporters critically shape trade patterns, using firm-level data from 32 countries. In particular, variation in average firm size (the intensive margin) explains over two thirds of the variation in the sector distribution of exports across countries, the remaining share is explained by variation in the number of firms (the extensive margin). Variation in average firm size across sectors is largely driven by variation in the sectoral distribution of exports from the top 1 percent of firms in a country -- export superstars. In contrast, the sectoral distribution of exports from the remaining 99 percent of firms is more similar across countries, and the distribution of the total number of firms across sectors is very similar across countries. This paper also finds that current export superstars typically entered the export market relatively large, reached the top 1 percent after less than three years of exporting, and account for more than half of a country's total exports, export growth and diversification. The results underscore the role of individual firms in determining both trade volumes and trade patterns.
Number of Pages in PDF File: 42
Keywords: Microfinance, Free Trade, Economic Theory & Research, Trade Policy, Small Scale Enterprise
Date posted: October 11, 2012
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