Domestic and foreign sales: Complements or substitutes?

Matteo Bugamelli, Eugenio Gaiotti and Eliana Viviano

Economics Letters, 2015, vol. 135, issue C, 46-51

Abstract: How and why are the dynamics of foreign and domestic sales correlated at the firm level? The empirical answers to the question, which have bearings on the transmission of shocks and on the design of stabilization policies, are rather mixed. Some papers argue for a positive correlation, based on the impact of liquidity constraints in financing exports; others conclude for a negative correlation induced by capacity constraints. Taking advantage of a sample of Italian manufacturing firms over 2001–2012, we show that the sign of the average correlation varies over the business cycle, depending on changes in the relative severity of liquidity, credit and capacity constraints.

Keywords: Domestic sales; Foreign sales; Credit constraints; Capacity constraints (search for similar items in EconPapers)
JEL-codes: F10 F12 F14 L11 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176515002979
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Domestic and foreign sales: complements or substitutes? (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:135:y:2015:i:c:p:46-51

DOI: 10.1016/j.econlet.2015.07.024

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().