Superstar Exporters: An Empirical Investigation of Strategic Interactions in Danish Export Markets

Federico Ciliberto and Jäkel, Ina

No 15236, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In many countries, exports are highly concentrated among a few "superstar" firms. We estimate the export decisions of superstar firms as the result of a complete information, simultaneous, discrete choice, static entry game. We employ a dataset on the universe of Danish trade transactions by firm, product and destination. We also obtain detailed information on applied, preferential tariff protection from the MAcMap-HS6 database. We find evidence of strong negative competitive effects of entry: in the absence of strategic competitive effects, firms would be 53.2 percentage points more likely to export to a given market. Next, we run two counterfactual exercises. We show that failing to account for the strategic interaction among superstar exporters leads to: (i) overstating the probability that firms would start exporting to a market following tariff elimination by a factor of two; and, (ii) overstating the probability that firms would stop exporting to a market if tariffs were imposed by a factor of more than five.

Keywords: Export participation; Strategic interaction; Multiple equilibria; Trade policy (search for similar items in EconPapers)
JEL-codes: F12 F14 L13 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-com and nep-int
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Related works:
Journal Article: Superstar exporters: An empirical investigation of strategic interactions in Danish export markets (2021)
Working Paper: Superstar Exporters: An Empirical Investigation of Strategic Interactions in Danish Export Market (2017)
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