New Exporter Dynamics

24 Pages Posted: 28 Aug 2017

See all articles by Kim Ruhl

Kim Ruhl

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Jonathan L. Willis

Federal Reserve Bank of Kansas City

Date Written: August 2017

Abstract

We document that new exporters initially export small amounts, grow gradually, and are most likely to exit the export market in their first few years. We find that the standard sunk‐cost model cannot replicate these new exporter dynamics: New exporters grow too large too quickly and live too long. In a modified sunk‐cost model that can account for these facts, the entry costs needed to match the data are three times smaller than in the sunk‐cost model. Dynamic models with richer plant‐level heterogeneity are needed.

Suggested Citation

Ruhl, Kim and Willis, Jonathan, New Exporter Dynamics (August 2017). International Economic Review, Vol. 58, Issue 3, pp. 703-726, 2017, Available at SSRN: https://ssrn.com/abstract=3026813 or http://dx.doi.org/10.1111/iere.12232

Kim Ruhl (Contact Author)

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States

Jonathan Willis

Federal Reserve Bank of Kansas City ( email )

1 Memorial Dr.
Kansas City, MO 64198
United States
816-881-2852 (Phone)
816-881-2199 (Fax)

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