Exporter Dynamics and Partial-Year Effects

Abstract

Two identical firms that start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down first year export levels and biases up first year export growth rates. For Peruvian exporters, the partialyear bias is large: first-year export levels are understated by 65 percent and the first year growth rate is overstated by 112 percentage points. Correcting the partial-year effect eliminates high first year export growth rates, raises initial export levels and almost doubles the contribution of net firm entry and exit to overall export growth.

The Life-Cycle Dynamics of Exporters and Multinational Firms

“…As the French data contain monthly export sales, we can correct for partial-year effects using the methodology proposed by Bernard et al (2017). Appendix Figure C.3a confirms that the entry year does seem contaminated by these effects: Growth at age one is much higher for the calendaryear data than for the adjusted data; for subsequent ages, growth rates are quite similar, which gives confidence in the age-one normalization in Figure 2.…”

“…We demean the firm-destination observations by industry, year, and destination fixed effects. We normalize sales with respect to one year after entry because the entry year may be contaminated, particularly for exporters, by the so-called "partial-year effects"-i.e., artificially high first-year growth rates because of firms that started operations in the middle of the entry year (see Bernard et al, 2017). Notes: Log of firm-destination export (affiliate) sales with respect to firm-destination export (affiliate) sales in the year after entry, for firms with five or more years in the market, in each mode.…”

Posts as Trade Facilitators

“…14 It has been shown that differences in the precise timing within a year in which export flows start may substantially affect measurement of total exports in the first year and accordingly that of the export growth rate between the first and the second year (see Bernard et al, 2015). In our setting, it might be the case that, due to seasonality reasons, Exporta Fácil and regular products are exported in different months, which would create a systematic bias in the measurement of the first export.…”

One‐off export events

“…None have dealt with the prevalence of one-off export events. Recently, Bernard et al (2017) employ monthly Peruvian data to examine the bias in annual data stemming from partial-year effects.…”

“…Recently, Bernard et al. () employ monthly Peruvian data to examine the bias in annual data stemming from partial‐year effects.…”