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Export decision under risk

José de Sousa (), Anne-Célia Disdier () and Carl Gaigne

No 205584, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Does demand volatility matter for exports? How do exporting firms deal with skewed demand? A simple model of downside risk aversion shows that on average exporters increase export prices and reduce export volumes when demand volatility in destination markets increases. They behave the opposite way when demand skewness rises. We find that the moments of the demand distribution also affect the number of exporting firms and the industry supply. These adjustments may lead some firms to increase their exports when demand volatility increases. These theoretical predictions are put to the test by using French firm-level exports across destination markets with different levels of demand volatility and skewness. The firm-level results, over the period 2000-2009, are consistent with our predictions.

Keywords: International Relations/Trade; Risk and Uncertainty (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-int and nep-upt
Date: 2015
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http://ageconsearch.umn.edu/record/205584/files/Gaigne-AAEA-SF.pdf (application/pdf)

Related works:
Working Paper: Export Decision under Risk (2017) Downloads
Working Paper: Export Decision under Risk (2017) Downloads
Working Paper: Export Decision under Risk (2016) Downloads
Working Paper: Export Decision under Risk (2015) Downloads
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