EconPapers    
Economics at your fingertips  
 

The Proximity-Concentration Tradeoff under Uncertainty

Natalia Ramondo, Veronica Rappoport and Kim Ruhl ()

Review of Economic Studies, 2013, vol. 80, issue 4, 1582-1621

Abstract: In this article, we analyse the firm's choice between serving a foreign market through exports or through foreign affiliate sales in an environment characterized by country-specific shocks to the cost of production. Our model predicts that country pairs with less-correlated output fluctuations trade more, relative to affiliate sales, whereas countries with more-volatile fluctuations are served relatively more by exporters than by foreign affiliates selling abroad. Using detailed data on trade and affiliate sales, we find empirical support for our model's predictions. Copyright 2013, Oxford University Press.

Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (25) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdt018 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The proximity-concentration tradeoff under uncertainty (2013) Downloads
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:oup:restud:v:80:y:2013:i:4:p:1582-1621

Access Statistics for this article

Review of Economic Studies is currently edited by Andrea PratEditor-Name: Bruno BiaisEditor-Name: Kjetil StoreslettenEditor-Name: Enrique Sentana

More articles in Review of Economic Studies from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2019-11-30
Handle: RePEc:oup:restud:v:80:y:2013:i:4:p:1582-1621