2016
DOI: 10.21034/sr.524
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How Exporters Grow

Abstract: We document how export quantities and prices evolve after entry to a market. Controlling for marginal cost, and taking account of selection on idiosyncratic demand, there are economically and statistically significant dynamics of quantities, but no dynamics of prices. To match these facts, we estimate a model where firms invest in customer base through non-price actions (e.g. marketing and advertising), and learn gradually about their idiosyncratic demand. The model matches quantity, price and exit moments. Pa… Show more

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Cited by 26 publications
(43 citation statements)
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References 26 publications
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“…I will test the latter explanation below, and develop a theory that incorporates both mechanisms. My findings are consistent with Fitzgerald et al (2016), who show that exporters gradually increase their sales into a new destination country. My results highlight that the pattern also holds for individual relationships.…”
Section: Dynamics Of Value Tradedsupporting
confidence: 90%
“…I will test the latter explanation below, and develop a theory that incorporates both mechanisms. My findings are consistent with Fitzgerald et al (2016), who show that exporters gradually increase their sales into a new destination country. My results highlight that the pattern also holds for individual relationships.…”
Section: Dynamics Of Value Tradedsupporting
confidence: 90%
“…23 Con- 22 Dickstein and Morales (2016) find that large firms have more information relevant to predict rijt than small firms, and their evidence suggests that this informational advantage is due to larger investments in acquiring information. Multiple papers provide evidence consistent with within-firm learning (Albornoz et al, 2012;Berman et al, 2015;Arkolakis et al, 2015b;Timoshenko, 2015a,b;Bastos et al, 2016;Fitzgerald et al, 2016).…”
Section: Optimal Export Destinationsmentioning
confidence: 90%
“…reflecting variation in quality and taste among consumers-are the principal reason why some firms succeed in the marketplace while others fail. In addition, as documented by Roberts et al (2012), Eaton et al (2015), and Fitzgerald et al (2016), customer markets considerations also importantly shape the pricing decision of exporting firms in both advanced and emerging market economies.…”
Section: Inflation Dynamics By Selected Firm Characteristicsmentioning
confidence: 95%