Demand Learning and Firm Dynamics: Evidence from Exporters

Nicolas Berman (), Vincent Rebeyrol and Vincent Vicard

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Abstract: This paper provides direct evidence that learning about demand is an important driver of firms' dynamics. We present a model of Bayesian learning in which firms are uncertain about idiosyncratic demand in each market and update their beliefs as noisy information arrives. Firms update their beliefs to a given demand shock more, the younger they are. We test and empirically confirm this prediction, using the structure of the model, together with exporter-level data, to identify demand shocks and the firms' beliefs about future demand. Consistent with theory, we also find the learning process to be weakened in more uncertain environments.

Keywords: Exports; Demand; Firm growth; Belief updating; Uncertainty (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-bec
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-02111159v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published in Review of Economics and Statistics, 2019, 101 (1), pp.91-106. ⟨10.1162/rest_a_00731⟩

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Related works:
Working Paper: Demand Learning and Firm Dynamics: Evidence from Exporters (2018)
Working Paper: Demand Learning and Firm Dynamics: Evidence from Exporters (2018)
Working Paper: Demand learning and firm dynamics:evidence from exporters (2016)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02111159

DOI: 10.1162/rest_a_00731

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