Sequential Exporting Across Countries and Products

112 Pages Posted: 4 Dec 2021

See all articles by Facundo Albornoz

Facundo Albornoz

University of Nottingham

Hector F. Calvo Pardo

University of Southampton - Economics Division

Gregory Corcos

Université d'Abomey-Calavi - Ecole Polytechnique

Emanuel Ornelas

Sao Paulo School of Economics

Multiple version iconThere are 3 versions of this paper

Abstract

How do exporters enter and expand their product scope and geographical presence? We show that exporters add products and countries sequentially, in an interdependent process. This process can be explained by a mechanism where new exporters are uncertain about the profitability of their products in different markets, but learn it as they start to export. Exploiting disaggregated data on French exporters, we find empirical evidence consistent with such a mechanism, where firms learn from their initial export experiences and adjust their sales, number of products and destination countries accordingly. Our results indicate that part of the learning is firm-specific, and not merely product- or market-specific. Furthermore, we find that firms tend to expand in the sub-extensive margin first by widening product scope within a destination and later by entering new destinations; and that firms' core products are particularly resilient despite being used to ``test the waters" when entering additional countries.

Keywords: Export dynamics, experimentation, Uncertainty, multiproduct firms, market interdependence

Suggested Citation

Albornoz, Facundo and Calvo Pardo, Hector F. and Corcos, Gregory and Ornelas, Emanuel, Sequential Exporting Across Countries and Products. Available at SSRN: https://ssrn.com/abstract=3977777 or http://dx.doi.org/10.2139/ssrn.3977777

Facundo Albornoz

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Hector F. Calvo Pardo

University of Southampton - Economics Division ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom
+442380595051 (Phone)
+442380593858 (Fax)

Gregory Corcos

Université d'Abomey-Calavi - Ecole Polytechnique

Cotonou
Benin

Emanuel Ornelas (Contact Author)

Sao Paulo School of Economics ( email )

Rua Itapeva 474 s.1202
São Paulo, São Paulo 01332-000
Brazil

HOME PAGE: http://https://sites.google.com/site/emanuelornelaseo/

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