Learning how to export

Paul Segerstrom and Ignat Stepanok

No 1801, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In this paper, we present a standard quality ladders endogenous growth model with one significant new assumption, that it takes time for firms to learn how to export. We show that this model without Melitz-type assumptions can account for all the evidence that the Melitz (2003) model was designed to explain plus much evidence that the Melitz model can not account for. In particular, consistent with the empirical evidence we find that trade liberalization leads to a higher exit rate of firms, that exporters charge higher prices for their products as well as higher markups, and that many large firms do not export. We also find that trade iberalization promotes economic growth and that it has the opposite effect of retarding economic growth in a closely comparable growth model with Melitz-type assumptions.

Keywords: trade liberalization; heterogeneous firms; quality ladders; endogenous growth (search for similar items in EconPapers)
JEL-codes: F12 F13 F43 O31 O41 (search for similar items in EconPapers)
Date: 2012
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https://www.econstor.eu/bitstream/10419/67339/1/731551524.pdf (application/pdf)

Related works:
Journal Article: Learning How To Export (2018)
Working Paper: Learning How to Export (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1801

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