Exports, Investment and Firm-Level Sales Volatility

Alejandro Riaño

No 3319, CESifo Working Paper Series from CESifo

Abstract: This paper presents a dynamic model of risk-averse producers’ decision to invest in physical capital and to export. The model features irreversible investment, no capital markets and fixed and sunk costs to export. Several features of the distribution of investment rates and export participation patterns observed in firm-level data are closely matched in a calibration exercise. Counterfactual experiments show that large adjustments in total sales associated with entry into foreign markets increase the volatility of total sales for exporting firms.

Keywords: exports; investment; uncertainty (search for similar items in EconPapers)
JEL-codes: E22 F12 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (11)

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Journal Article: Exports, investment and firm-level sales volatility (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3319

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