 Learning and Selection into ExportingTheodore Papageorgiou and
Costas Arkolakis
No 183, 2009 Meeting Papers from Society for Economic Dynamics Abstract: We incorporate learning in a monopolistically competitive model of trade with heterogeneous firms. Exporting firms face uncertainty about the demand their product faces in a given market and decide how much marketing to invest in. The incorporation of marketing in the model is essential because it allows learning to affect the growth rate of sales: firms that realize that their product faces high demand are willing to devote more resources to market it and as a result their sales grow. The model is analytically tractable to a large extent, and we derive closed form expressions for the growth rate of sales. Furthermore, it is consistent with the large turnover of young exporters observed in the data and it implies a higher variability in their growth rates. We are currently evaluating the predictions of the model regarding the relationship between growth rates and exporting age of the firm. Additionally, we plan to assess the ability of the model to quantitatively match the turnover of exporting firms and the growth of their sales as documented by Eaton, Eslava, Krizan, Kugler and Tybout (2008). Date: 2009 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:183 Access Statistics for this paper More papers in 2009 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.