Two-sided Heterogeneity and Trade

Karen Helene Ulltveit-Moe, Andrew Bernard and Andreas Moxnes

No 9681, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Empirical studies of firms within industries consistently report substantial heterogeneity in measures of performance such as size and productivity. This paper explores the consequences of joint heterogeneity on the supply side (sellers) and the demand side (buyers) in international trade using a novel transaction-level dataset from Norway. Domestic exporters as well as foreign importers are explicitly identified in each transaction to every destination. The buyer-seller linked data reveal a number of new stylized facts on the distributions of buyers per exporter and exporters per buyer, the matching among sellers and buyers and the variation of buyer dispersion across destinations. The paper develops a model of trade with heterogeneous importers as well as heterogeneous exporters where matches are subject to a relation-specific fixed cost. The model matches the stylized facts and generates new testable predictions emphasizing the importance of importer heterogeneity in explaining trade patterns.

Keywords: Exporters; Heterogeneous firms; Importers; Trade elasticity (search for similar items in EconPapers)
JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Two-Sided Heterogeneity and Trade (2018)
Working Paper: Two-sided heterogeneity and Trade (2016)
Working Paper: Two-sided heterogeneity and trade (2016)
Working Paper: Two-sided Heterogeneity and Trade (2016)
Working Paper: Two-Sided Heterogeneity and Trade (2014)
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