Where Do Firms Export, How Much and Why?

24 Pages Posted: 16 Aug 2014

See all articles by Martina Lawless

Martina Lawless

Central Bank and Financial Services Authority of Ireland - Economic Analysis and Research Department

Karl Whelan

University College Dublin (UCD)

Date Written: August 2014

Abstract

The empirical finding that exporting firms are more productive on average than non‐exporters has provoked a large theoretical literature based on models such as Melitz ([Melitz, M. J., 2003]), where more productive firms are more likely to overcome costs associated with trade. This paper investigates how closely the productivity heterogeneity framework fits the data from a firm‐level survey that includes information on export destinations and firm characteristics such as productivity. We find a high degree of unpredictable idiosyncratic participation in export markets by firms and a relatively weak positive correlation between the extent of a firm's export market participation and its export sales. We find that a small number of standard gravity variables provide a close fit to the country‐level determinants of trade but that greater variation results in more difficulty in explaining firm‐specific factors driving exporting behaviour. We also illustrate some elements of the dynamics over time in firm exporting patterns by destination. We show that lagged exporting activity has a significant effect on a firm's current exporting profile.

Suggested Citation

Lawless, Martina and Whelan, Karl, Where Do Firms Export, How Much and Why? (August 2014). The World Economy, Vol. 37, Issue 8, pp. 1027-1050, 2014, Available at SSRN: https://ssrn.com/abstract=2481383 or http://dx.doi.org/10.1111/twec.12148

Martina Lawless (Contact Author)

Central Bank and Financial Services Authority of Ireland - Economic Analysis and Research Department ( email )

Dame Street
P.O. Box 559
Dublin 2
Ireland

Karl Whelan

University College Dublin (UCD) ( email )

Belfield
Belfield, Dublin 4 4
Ireland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
319
PlumX Metrics