Self-selection along different export and import markets

Francesco Serti and Chiara Tomasi ()

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: How are firms' performances influenced by the specific characteristics of markets where exports are directed and imports originate from? Using a rich database on Italian manufacturing firms, this essay adds new evidence on the relationship between trade status and firm characteristics. First, exploiting firm-level information on the destination of export and the origin of imports, we observe the heterogeneity among firms trading with different type of markets. We show that different destinations of exports and different origins of imports map into distinctive firm characteristics. Second, we test the hypothesis that the self-selection mechanisms occur market to market. We observe that firms exporting to and importing from high income countries face higher sunk costs than those trading with less developed markets. Third, we investigate the underlying sources of these ex-ante differences by looking at how countries' characteristics such as population, exchange rate, productivity and distance may impact on firms' performances.

Keywords: heterogeneous firms; exports; imports; productivity; market of destination and origin (search for similar items in EconPapers)
JEL-codes: F10 F16 J21 (search for similar items in EconPapers)
Date: 2009-12-10
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2009/18

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