En route to the world: understanding firms that solely export

Zara Liaqat () and Karrar Hussain ()
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Zara Liaqat: University of Waterloo
Karrar Hussain: Institute of Economics, FAU Erlangen-Nürnberg

Economics Bulletin, 2020, vol. 40, issue 4, 2872-2886

Abstract: We present novel empirical evidence to characterize the export and import patterns of firms that only export. Using a rich customs database encompassing the universe of foreign trade transactions in Pakistan over 2011-2014, we establish five stylized facts concerning various attributes of pure exporters in the context of a developing country. First, pure exporters have significantly smaller sales, export earnings, and import spending, compared to exporting firms that also sell in the domestic market. Second, pure exporters enter a greater number of foreign destinations, on average, and sell a wider range of products, irrespective of the degree of product differentiation. Third, pure exporters import fewer numbers of inputs, and within narrowly defined product categories, use less expensive varieties of imported inputs. Fourth, within a given product-destination pair, the average export price set by pure exporters is significantly lower compared to that charged by other exporters. Lastly, market size, income, and distance from the destination country are positively associated with the likelihood of an exporting firm to be a pure exporter.

Keywords: Export intensity; Pure exporters; Gravity; Developing countries (search for similar items in EconPapers)
JEL-codes: F1 O5 (search for similar items in EconPapers)
Date: 2020-10-23
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Citations: View citations in EconPapers (3)

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