Shipment frequency of exporters and demand uncertainty

G. B k s, L. Fontagn , Balazs Murakozy and Vincent Vicard
Authors registered in the RePEc Author Service: Lionel Fontagné and Gábor Békés

Working papers from Banque de France

Abstract: This paper analyzes how firms adjust to differences in market size and demand uncertainty by changing the frequency and size of their export shipments. In our inventory model, transportation costs and optimal shipment frequency are determined on the basis of demand as well as inventory and per shipments costs. Using a cross section of detailed monthly firm-product-destination level French export data we show that, in line with the predictions of the model, firms adjust on both margins for market size. In a stochastic setting, increased demand uncertainty is associated with larger logistics costs as well as a more convex marginal cost function. Firms adjust to increased uncertainty by reducing their sales and, for a given export volume, by reducing their number of shipments and increasing their shipment size. We show that these predictions of the model are in line with patterns in the data.

Keywords: Gravity; Transport costs; Frequency of trade; Inventory model; Firms. (search for similar items in EconPapers)
JEL-codes: D40 F12 R40 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2014
New Economics Papers: this item is included in nep-int and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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https://publications.banque-france.fr/sites/defaul ... g-paper_479_2014.pdf (application/pdf)

Related works:
Journal Article: Shipment frequency of exporters and demand uncertainty (2017)
Working Paper: Shipment frequency of exporters and demand uncertainty (2017)
Working Paper: Shipment frequency of exporters and demand uncertainty (2017)
Working Paper: Shipment frequency of exporters and demand uncertainty (2017)
Working Paper: Shipment Frequency of Exporters and Demand Uncertainty (2014)
Working Paper: Shipment Frequency of Exporters and Demand Uncertainty (2014)
Working Paper: Shipment Frequency of Exporters and Demand Uncertainty (2014)
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