Export dynamics and sales at home

Nicolas Berman (), Antoine Berthou and Jérôme Héricourt

No 14-2011, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: How do firms' sales interact across markets? Are foreign and domestic sales complements or substitutes? Using a large French firm-level database that combine balance-sheet and product-destination-specific export information over the period 1995-2001, we study the interconnections between exports and domestic sales. We identify exogenous shocks that affect firm demand on foreign markets to instrument yearly variations in exports. Our results show that exogenous variations in foreign sales are positively associated with domestic sales, even after controlling for changes in domestic demand. A 10% exogenous increase in exports generates a 1.5 to 3% increase in domestic sales in the short-term. This result is robust to various estimation techniques, instruments, controls, and sub-samples. It is also supported by the natural experiment of the Asian crisis in the late 1990's. We discuss various channels that may explain this complementarity.

Keywords: Export dynamics; domestic sales; liquidity (search for similar items in EconPapers)
JEL-codes: F1 F14 F44 L2 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-10
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (21)

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Working Paper: Export dynamics and sales at home (2012)
Working Paper: Export Dynamics and Sales at Home (2011)
Working Paper: Export dynamics and sales at home (2011)
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