The buyer margins of firms' exports

Jeronimo Carballo, Gianmarco Ottaviano and Christian Volpe Martincus

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter's foreign sales of any product in a given destination are in turn accounted for by a dominant buyer. We propose an analytically solvable multi-country model of endogenous selection in which dominant exporters, dominant products and dominant buyers emerge in parallel as multi-product sellers with heterogeneous technologies compete for buyers with heterogeneous needs. The model not only provides an explanation of the existence of dominant buyers but also makes specific predictions on how the relative importance of dominant buyers should vary across export destinations depending on their market size and accessibility. We show that these predictions are borne out by our data and discuss their welfare implications in terms of gains from trade.

Keywords: Firm heterogeneity; taste heterogeneity; import-export relations; competition; selection (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Date: 2018-05-01
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of International Economics, 1, May, 2018, 112, pp. 33-49. ISSN: 0022-1996

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http://eprints.lse.ac.uk/87084/ Open access version. (application/pdf)

Related works:
Journal Article: The buyer margins of firms' exports (2018)
Working Paper: The buyer margins of firms' exports (2016)
Working Paper: The Buyer Margins of Firms' Exports (2013)
Working Paper: The Buyer Margins of Firms' Exports (2013)
Working Paper: The buyer margins of firms' exports (2013)
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