Exports, borders, distance, and plant size

Thomas Holmes () and John Stevens ()

No 2010-38, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The fact that large manufacturing plants export relatively more than small plants has been at the foundation of much work in the international trade literature. We examine this fact using Census micro data on plant shipments from the Commodity Flow Survey. We show the fact is not entirely an international trade phenomenon; part of it can be accounted for by the effect of distance, distinct from any border effect. Export destinations tend to be further than domestic destinations, and large plants tend to ship further distances even to domestic locations, as compared with small plants. We develop an extension of the Melitz (2003) model and use it to set up an analysis with model interpretations of ratios between large plant and small plant shipments that can be calculated with the data. We obtain a decomposition of the overall ratio into a term that varies with distance, holding fixed the border, and a term that varies with the border, holding fixed the distance. The distance term accounts for more than half of the overall difference.

Keywords: Industrial location; Exports (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-int and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Exports, borders, distance, and plant size (2012)
Working Paper: Exports, Borders, Distance, and Plant Size (2010)
Working Paper: Exports, Borders, Distance, and Plant Size (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2010-38

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