Export Decision Under Risk

José de Sousa

Universite Paris I Pantheon-Sorbonne; Université Rennes I

Anne-Célia Disdier

Paris School of Economics (PSE)

Carl Gaigné

National Institute for Agricultural Research (INRA)

October 20, 2016

CESifo Working Paper Series No. 6134

Using firm and industry data, we establish two facts: (i) Uncertainty about demand conditions not only reduces export sales and exporting probabilities but also makes exports less sensitive to trade policy; (ii) the most productive exporters are more affected by higher industry-wide expenditure volatility than the least productive exporters. We rationalize these regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation of export shares from the most to the least productive incumbents. Greater skewness of the demand distribution and/or higher trade cost weaken this effect. Our results hold for a large class of consumer utility functions.

Number of Pages in PDF File: 51

Keywords: firm exports, demand uncertainty, risk aversion, expenditure volatility, skewness

JEL Classification: D210, D220, F120, F140

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Date posted: November 29, 2016  

Suggested Citation

de Sousa, José and Disdier, Anne-Célia and Gaigné, Carl, Export Decision Under Risk (October 20, 2016). CESifo Working Paper Series No. 6134. Available at SSRN: https://ssrn.com/abstract=2876553

Contact Information

José De Sousa
Universite Paris I Pantheon-Sorbonne ( email )
106-112 Bd. de l'Hopital
75634 Paris Cedex 13
Université Rennes I ( email )
7, place Hoche
Rennes, Rennes 35700
Anne-Célia Disdier (Contact Author)
Paris School of Economics (PSE) ( email )
48 Boulevard Jourdan
Paris, 75014 75014
Carl Gaigné
National Institute for Agricultural Research (INRA) ( email )
147, rue de l'Universite
Paris Cedex 07, 75338
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