What happens in Paris, does not stay in Paris: trade fairs and search and matching frictions

Gabor Bekes, Matyas Molnar and Claudia Steinwender

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Search and matching frictions keep firms from forming international trade links. Trade fairs are a common, often subsidized remedy, yet causal evidence is scarce. We study Hungarian firms at the 1900 Paris World Exhibition. A trial exhibition in Budapest four years earlier had sorted firms into award classes that revealed their export potential before selection. This allows us to bound the effect with control firms from the award class above and below. We build a panel of 3,614 manufacturing firms for 1896-1909 from over 12,000 records across eleven historical sources. Participation raised the probability of exporting outside Austria-Hungary by 4.2 to 18.3 percentage points, against a 15 percent baseline, and the effect was still visible in 1909. The gains went to firms already exporting and were largest where there were many buyers and few domestic rivals. Patenting also rose, though innovation came with exporting rather than alongside it, and employment grew by 17.7 to 27.1 percent over eight years. These are private returns to selected participation: the fair is a congestible platform, so sending more similar firms need not deliver the same gain.

Keywords: buyer-supplier links; export promotion; trade fairs; search frictions; industrial policy; economic history; partial identification (search for similar items in EconPapers)
Date: 2026-06-10
New Economics Papers: this item is included in nep-bec, nep-his, nep-iaf and nep-int
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