Where do firms export, how much, and why?

Martina Lawless and Karl Whelan ()

No 200821, Working Papers from School of Economics, University College Dublin

Abstract: The empirical finding that exporting firms are more productive on average than non-exporters has provoked a large theoretical literature based on models such as Melitz (2003), where more productive firms are more likely to overcome costs associated with trade. This paper provides a systematic empirical assessment of the Melitz framework using a unique Irish dataset that includes information on destinations and firm characteristics such as productivity. We find a number of interesting deviations from the model’s predictions including a high degree of unpredictable idiosyncratic participation in export markets by firms, a relatively weak positive correlation between the extent of export participation and export sales, and a limited role for productivity in explaining firm exporting behavior. We illustrate the effect of firm heterogeneity on gravity regressions of aggregate trade flows and show how past exporting to a particular market has a strong impact on the current probability of exporting there.

Keywords: Exports--Ireland; Industrial productivity--Ireland; Export trading companies--Ireland (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-bec and nep-int
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Citations: View citations in EconPapers (34)

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http://hdl.handle.net/10197/971 First version, 2008 (application/pdf)

Related works:
Journal Article: Where Do Firms Export, How Much and Why? (2014)
Working Paper: Where do Firms Export, How Much and Why? (2008)
Working Paper: Where do firms export, how much, and why? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200821

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