Demand Learning and Firm Dynamics: Evidence from Exporters

Nicolas Berman (), Vincent Rebeyrol and Vincent Vicard

The Review of Economics and Statistics, 2019, vol. 101, issue 1, 91-106

Abstract: Abstract This paper provides direct evidence that learning about demand is an important driver of firms’ dynamics. We present a model of Bayesian learning in which firms are uncertain about idiosyncratic demand in each market and update their beliefs as noisy information arrives. Firms update their beliefs to a given demand shock more, the younger they are. We test and empirically confirm this prediction, using the structure of the model, together with exporter-level data, to identify demand shocks and the firms’ beliefs about future demand. Consistent with theory, we also find the learning process to be weakened in more uncertain environments.

Date: 2019
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Related works:
Working Paper: Demand Learning and Firm Dynamics: Evidence from Exporters (2019)
Working Paper: Demand Learning and Firm Dynamics: Evidence from Exporters (2018)
Working Paper: Demand Learning and Firm Dynamics: Evidence from Exporters (2018)
Working Paper: Demand learning and firm dynamics:evidence from exporters (2016)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
Working Paper: Demand learning and firm dynamics: evidence from exporters (2015)
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