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Sequential exporting across countries and products

Facundo Albornoz, Hector Calvo Pardo, Gregory Corcos and Emanuel Ornelas

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: How do exporters expand their product scope and geographical presence? We argue that new exporters are uncertain about their profitability in different countries and products, but learn it as they start to export. As a consequence, exporters add products and countries sequentially, in an interdependent process. Exploiting disaggregated data on French exporters, we find empirical support consistent with such a mechanism, where firms learn from their initial export experiences and then adjust their sales, number of products and destination countries accordingly. Our results indicate that part of the learning is firm-specific, and not merely product- or market-specific. Furthermore, we find that firms tend to expand in the sub-extensive margin first by widening product scope within a destination and later by entering new destinations; and that firms' core products are particularly resilient despite being used to "test the waters" when entering additional countries.

Keywords: export dynamics; experimentation; uncertainty; multiproduct firms; market inter-dependence (search for similar items in EconPapers)
Date: 2021-06-02
New Economics Papers: this item is included in nep-bec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Sequential Exporting across Countries and Products (2021) Downloads
Working Paper: Sequential exporting across countries and products (2021) Downloads
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