Sequential Exporting Products across Countries

Emanuel Ornelas, Facundo Albornoz, Hector Calvo Pardo and Gregory Corcos

No 16208, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Exploiting disaggregated data on French exporters, we show that firms expand their product scope and geographical presence sequentially. This process of internationalization is uneven over time, exhibiting more volatility early than later in the life cycle of exporters. Specifically, young exporters are particularly likely to exit, and if they keep exporting, to expand at the intensive and sub-extensive margins, doing so by widening product scope within a destination before entering new destinations. We also find that firms' core products are particularly resilient despite being used to ``test the waters" when entering additional countries. Existing models of firm export dynamics are not designed to explain these empirical regularities. We argue that they can be rationalized by a mechanism where new exporters are uncertain about the profitability of their products in different markets, but learn from their initial export experiences and then adjust their sales, number of products and destination countries accordingly.

Keywords: Export dynamics; Experimentation; Uncertainty; Multiproduct firms; Market interdependence (search for similar items in EconPapers)
JEL-codes: D22 F10 F14 L25 (search for similar items in EconPapers)
Date: 2021-06
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Journal Article: Sequentially exporting products across countries (2023)
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Working Paper: Sequentially exporting products across countries (2022)
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