Export Dynamics and Sales at Home

43 Pages Posted: 23 Nov 2012

See all articles by Nicolas Berman

Nicolas Berman

Graduate Institute of International and Development Studies (IHEID)

Antoine Berthou

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques; Paris School of Economics (PSE)

Jérôme Héricourt

LEM-CNRS (UMR 9221)

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2012

Abstract

How do firms' sales interact across markets? Are foreign and domestic sales complements or substitutes? Using a large French firm-level database that combines balance-sheet and product-destination-specific export information over the period 1995-2001, we study the interconnections between exports and domestic sales. We identify exogenous shocks that affect the firms' demand in foreign markets to instrument yearly variations in exports. We use alternatively as instruments product-destination specific imports or tariffs changes, and large foreign shocks such as financial crises or civil wars. Our results show that exogenous variations in foreign sales are positively associated with domestic sales, even after controlling for changes in domestic demand. A 10% exogenous increase in exports generates a 1.5 to 3% increase in domestic sales in the short-term. This result is robust to various estimation techniques, instruments, controls, and sub-samples. It is also supported by the natural experiment of the Asian crisis in the late 1990's. We discuss various channels that may explain this complementarity.

Keywords: Export dynamics, domestic sales, liquidity

JEL Classification: F10, F44, L20

Suggested Citation

Berman, Nicolas and Berthou, Antoine and Hericourt, Jerome, Export Dynamics and Sales at Home (November 1, 2012). Banque de France Working Paper No. 408, Available at SSRN: https://ssrn.com/abstract=2179528 or http://dx.doi.org/10.2139/ssrn.2179528

Nicolas Berman

Graduate Institute of International and Development Studies (IHEID) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

Antoine Berthou (Contact Author)

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques ( email )

106/112 boulevard de l'Hopital
Paris Cedex 13, 75647
France
(+33)144078211 (Phone)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Jerome Hericourt

LEM-CNRS (UMR 9221) ( email )

Université Lille 1 Sciences et Technologies
Faculté des Sciences Economiques et Sociales
Villeneuve d'Ascq, 59655
France

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