Export Market Diversification and Productivity Improvements: Theory and Evidence from Argentinean Firms

Juvenal, Luciana; Monteiro, Paulo Santos

doi:10.2139/ssrn.2249956

Cited by 14 publications

(12 citation statements)

References 19 publications

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“…A classical paper by Hirsch and Lev (1971) shows, based on a panel of 500 firms from the Netherlands, Denmark and Israel, that firms with more diversified exports have less volatile sales, in line with standard portfolio theory. A more recent study by Juvenal and Monteiro (2013) shows that the exports of Argentinian firms with more diversified exports are more stable. Since volatility can have a strong negative effects on firms and their development, a recent literature has looked at how diversification, through the implied decrease in volatility, can improve productivity (Juvenal and Monteiro, 2013), help to finance investment (Shaver, 2011) or improve profitability (Wagner, 2014).…”

Section: Introductionmentioning

confidence: 98%

“…A more recent study by Juvenal and Monteiro (2013) shows that the exports of Argentinian firms with more diversified exports are more stable. Since volatility can have a strong negative effects on firms and their development, a recent literature has looked at how diversification, through the implied decrease in volatility, can improve productivity (Juvenal and Monteiro, 2013), help to finance investment (Shaver, 2011) or improve profitability (Wagner, 2014). 4 The rest of the paper is structured as follows.…”

Section: Introductionmentioning

confidence: 98%

“…In that case, a firm with 1 see e.g. Juvenal and Monteiro (2013) on the negative link between volatility and productivity. 2 These can also be interpreted as fixed costs of shipment.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Volatility and diversification of exports: Firm-level theory and evidence

Vannoorenberghe

Wang

2016

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We show using detailed firm-level Chinese data that, among small exporters, firms selling to a more diversified set of countries have more volatile exports, while the opposite holds among large exporters. This result, which stands in marked contrast to standard portfolio theory for small exporters, is robust to a wide array of specifications and controls. Our theoretical explanation for these observations rests on the presence of fixed costs of exports per destination and short-run demand shocks. In this setup, the volatility of a firm's exports depends not only on the diversification of its destination portfolio but also on whether it exports permanently to all markets. Among small exporters, a more diversified pool of destinations makes the firm more likely to export occasionally to some markets, thereby raising volatility. These results cast doubt on the commonly held belief that diversification must decrease volatility. Terms of use: Documents inJEL-Code: F100.

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Section: Introductionmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 98%

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Volatility and diversification of exports: Firm-level theory and evidence

Vannoorenberghe

Wang

2016

European Economic Review

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“…When compared to the 1990's, in the 2000-2010 period Morocco reached a higher average economic growth with less volatility. A channel through which input tariff reduction may impact growth volatility is by promoting export market diversification, which may reduce demand uncertainty and improve firms' performance, by increasing the incentives to invest(Juvenal and Santos Monteiro, 2013). Although this paper is not going to disentangle any causality between trade and growth, by exploiting the effect on different margins of trade it shows some evidence of the impact of input reduction tariff on export diversification.…”

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confidence: 83%

Does Input Tariff Reduction Impact Firms' Exports in the Presence of Import Tariff Exemption Regimes?

Bussolo

Cruz

2015

Policy Research Working Papers

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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“…Hashai (2014) showed that the interplay between 'adjustment costs', 'coordination costs' and within-industry diversification benefits, results in an 'S-curve' relationship between within-industry diversification and firm performance. Juvenal and Paulo (2013) examined the relationship between trade and investment in technology adoption when firms face demand uncertainty. Their model predicted that, for a given overall market size, exporting to several countries reduces firms' demand uncertainty and hence, raises incentives to invest in productivity improvements.…”

Section: Review Of Literaturementioning

confidence: 99%

Firm performance and diversification: an empirical investigation of chemical sector in India

Sahu

2017

IJSE

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This paper attempts to understand the relationship between firm performance and diversification for the sample firms in the chemical sector in India. Using concentric index of diversification, this paper relates firm performance and diversification for the chemical sector. The results of this study indicate that, higher diversification leads to poorer performance as firms try to diversify into areas beyond their current scope. This paper further concludes that diversification is not a very good strategy to increase profits in the context of Indian chemical industries. Though diversification to some extent may give positive results but higher diversification leads to poor performance. The contribution of this work lies in identifying diversification for the chemical sector in India and compare with firm characteristics in general, and with the firm performance in particular.

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Export Market Diversification and Productivity Improvements: Theory and Evidence from Argentinean Firms

Cited by 14 publications

References 19 publications

Volatility and diversification of exports: Firm-level theory and evidence

Volatility and diversification of exports: Firm-level theory and evidence

Does Input Tariff Reduction Impact Firms' Exports in the Presence of Import Tariff Exemption Regimes?

Firm performance and diversification: an empirical investigation of chemical sector in India

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