Dissecting Trade: Firms, Industries, and Export Destinations
Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)
Samuel S. Kortum
University of Chicago - Department of Economics; National Bureau of Economic Research (NBER)
National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
NBER Working Paper No. w10344
We examine entry across 113 national markets in 16 different industries using a comprehensive data set of French manufacturing firms. The data are unique in indicating how much each firm exports to each destination. Looking across all manufacturers: (1) Firms differ substantially in export participation, with most selling only at home; (2) The number of firms selling to multiple markets falls off with the number of destinations with an elasticity of -2.5; (3) Decomposing French exports to each destination into the size of the market and French share, variation in market share translates nearly completely into firm entry while about 60 percent of the variation in market size is reflected in firm entry. Looking within each of 16 industries we find little variation in these patterns. We propose that any successful model of trade and market structure must confront these facts.
Number of Pages in PDF File: 21
Date posted: March 17, 2004
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