Firm Export Dynamics in Interdependent Markets

Alonso Alfaro-Ureña, Juanma Castro-Vincenzi, Sebastian Fanelli and Eduardo Morales

No 31610, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate a model of firm export dynamics featuring cross-country complementarities. The firm decides where to export by solving a dynamic combinatorial discrete choice problem, for which we develop a solution algorithm that overcomes the computational challenges inherent to the large dimensionality of its state space and choice set. According to our estimated model, firms enjoy cost reductions when exporting to countries geographically or linguistically close to each other, or that share deep trade agreements. Countries, especially small ones, sharing these traits with attractive destinations receive significantly more exports than in the absence of complementarities.

JEL-codes: F12 F13 F14 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-dcm and nep-int
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