From Macro to Micro: Large Exporters Coping with Common Shocks

49 Pages Posted: 29 Jul 2022

See all articles by Jean Charles Bricongne

Jean Charles Bricongne

Banque de France

Juan Carluccio

Banque de France; Paris School of Economics

Lionel Gérard Fontagné

Banque de France; CEPII; University of Paris 1 Panthéon Sorbonne; Paris School of Economics

Guillaume Gaulier

Banque de France

Sebastian Stumpner

Banque de France

Date Written: 2022

Abstract

Since Gabaix (2011), the role of changes in the performance of some very large firms in shaping aggregate outcomes has been intensively studied in the economic literature. Changes in the performance of a few large firms can arise due to idiosyncratic shocks or idiosyncratic reactions to common shocks. This paper provides direct evidence for the second channel using data on the universe of French firm-level exports and imports over 1993-2020. Granularity matters for the micro-dynamics of aggregate French exports over the long run : the granular residual explains 42% of the variance in aggregate export growth during the period. Moreover, it co-moves with the macro shocks : the largest firms do better than average in good times and worse in bad times. Studying firm-level performance during the Great Financial Crisis and the Pandemic reveals that top exporters contributed to the export collapses disproportionably more than their pre-crisis share of exports, even within finely defined markets. We investigate the reasons for such over-reaction of the top exporters using the Pandemic as a natural experiment. We find that a higher elasticity to demand shocks explains the larger reaction of top exporters to the Pandemic, with GVC exposure having weak explanatory power. Our findings have macro implications, as they help understand the macro reaction to foreign shocks, and micro implications, since they can inform micro models of exports.

Keywords: granularity, exports, Covid crisis

JEL Classification: F140

Suggested Citation

Bricongne, Jean Charles and Carluccio, Juan and Fontagné, Lionel and Gaulier, Guillaume and Stumpner, Sebastian, From Macro to Micro: Large Exporters Coping with Common Shocks (2022). CESifo Working Paper No. 9857, Available at SSRN: https://ssrn.com/abstract=4175814 or http://dx.doi.org/10.2139/ssrn.4175814

Jean Charles Bricongne (Contact Author)

Banque de France ( email )

Paris
France

Juan Carluccio

Banque de France ( email )

Paris
France

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Lionel Fontagné

Banque de France ( email )

Paris
France

HOME PAGE: http://www.lionel-fontagne.eu/

CEPII ( email )

9 Rue Georges Pitard
Paris, 75015
France
+33 1 53 68 55 06 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France
+33 1 44 07 89 94 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

University of Paris 1 Panthéon Sorbonne ( email )

Maison des Sciences Economiques
106-112 Bd de l'Hôpital
Paris, 75013
France
+33 1 44 07 89 94 (Phone)
+33 1 53 68 55 01 (Fax)

HOME PAGE: http://lionelfontagne.weebly.com/

Guillaume Gaulier

Banque de France ( email )

Paris
France

Sebastian Stumpner

Banque de France ( email )

Paris
France

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