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The life-cycle dynamics of exporters and multinational firms

Anna Gumpert, Haishi Li, Andreas Moxnes, Natalia Ramondo and Felix Tintelnot

Journal of International Economics, 2020, vol. 126, issue C

Abstract: This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). Using rich firm-level data, we document a comprehensive set of facts on entry, exit, and growth of new exporters and new MNEs. Guided by these facts, we build a model based on the standard proximity-concentration trade-off extended to incorporate time-varying firm productivity and sunk costs of MNE entry. The calibrated version of the model goes far in matching cross-sectional and dynamic moments of the data on exporters and MNEs. Our results point to much higher sunk costs for MNE than for export activities. Finally, we show how including the choice to become an MNE affects the predicted export dynamics after a trade liberalization episode.

Keywords: International trade; Exporters; Multinational firm; Markov process; Sunk cost; Proximity-concentration trade-off; Trade liberalization (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: The Life-Cycle Dynamics of Exporters and Multinational Firms (2017) Downloads
Working Paper: The Life-Cycle Dynamics of Exporters and Multinational Firms (2017) Downloads
Working Paper: The Life-Cycle Dynamics of Exporters and Multinational Firms (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:126:y:2020:i:c:s0022199620300593

DOI: 10.1016/j.jinteco.2020.103343

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