ISO Standards: A Certificate to Expand Exports? Firm‐Level Evidence from Argentina

Does standard adoption help firms in developing countries overcome information barriers and thereby perform better in international markets? What are the channels through which certification affects firms' exports, the intensive margin, or the extensive margin? We provide evidence on the impact of certification on export performance using a unique firm‐level dataset for Argentina over the period 1998–2006. We find that ISO certification is associated with increased exports, along the extensive margin—primarily in terms of destination countries—and the intensive margin.     

Can Production Subsidies Explain China's Export Performance? Evidence from Firm‐level Data*

This paper analyses the relationship between production subsidies and firms’ export performance using a very comprehensive and recent firm‐level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity at the intensive margin, although this effect is conditional on firm characteristics. In particular, the positive relationship between subsidies and the intensive margin of exports is strongest among profit‐making firms, firms in capital‐intensive industries, and those located in non‐coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives, and privately owned firms) proves to be relatively less important.     

Multi-destination firms and the impact of exchange-rate risk on trade

Based on a French firm-level database that combines information on balance-sheet and destination-specific export information over the period 1995–2009, we document a new stylized fact related to the heterogeneous reaction of exporters to RER volatility: we show that strongly multi-destination firms tend to reduce significantly more their exports to a destination that faces higher exchange-rate volatility. We also show that, following an exchange-rate volatility shock in a given country, strongly multi-destination firms increase exports to all other destinations served. This specific behavior of multi-destination firms has significant aggregate implications. First, the bilateral aggregate impact is increasingly negative with the weight of multi-destination firms in total exports towards the considered destination. Second, the reallocation behavior of large, multi-destination firms ultimately translates into stable total French exports (summed over all destinations).     

Internet Technology and the Extensive Margin of Trade: Evidence from eBay in Emerging Economies

Online platforms such as eBay offer technologies that make it easier for firms to export. This paper dissects a new firm‐level dataset that covers sales made through eBay by sellers based in 21 emerging economies to provide a new lens through which to look at the effect of trade costs on the extensive margin of trade. Comparing eBay sellers with “offline” firm‐level data from the World Bank's Exporter Dynamics Database allows us to test whether the observed trade patterns on eBay fit with the trade‐liberalization predictions of heterogeneous‐firm models. We find that eBay firms export to more destinations, suggesting low destination‐specific fixed costs on eBay. We then show that the distribution of export destinations across eBay sellers is well approximated by a balls‐and‐bins model of frictionless trade, suggesting eBay indeed lowers fixed export costs. Finally, we compare the gravity of eBay with that of offline trade and find geographic distance, languages, and trade agreements to matter less for online trade.     

Immigrants,occupations and firm export performance

This paper investigates the export‐enhancing effect of immigrant workers and how this effect varies across occupations. We use a dataset made of French manufacturing firms from 1997 to 2009 and address the problem of endogenous employment choice using an instrumental variable‐two‐stage least squares (IV‐2SLS) strategy and a doubly robust estimator. Our results show that immigrants in both low‐ and high‐skilled occupations foster exports at both the intensive and the extensive margins. In addition, we show that this effect is spread across all export destinations.     

Pricing in International Markets: a "Small-country" Benchmark

The paper studies export pricing to market (PTM) in a “small‐country” context using a panel of disaggregated exports from Hong Kong since 1992. Conventional wisdom is that PTM is commonplace—except for US exports. This study provides a benchmark by which to interpret the puzzling behavior of US export prices. Empirically, Hong Kong's export price behavior is comparable to that of the US. This similarity reinforces the idea that PTM behavior is also a function of home market conditions and the ability to price discriminate across markets. There is little evidence of differences in PTM across Hong Kong's export destinations.     

Learning‐by‐Exporting Revisited: The Role of Intensity and Persistence*

Two non‐mutually exclusive hypotheses can explain the empirically established export premium: self‐selection of more productive firms into export markets and learning‐by‐exporting. This paper focuses on how the temporal dimension of firms' exporting activities and the intensity of exports influence the scope of learning effects. Using a panel of Swedish firms and dynamic generalized method of moments estimation, we find a learning effect among persistent exporters with high export intensity, but not among temporary exporters or persistent exporters with low export intensity. For small firms, exports boost productivity among persistent exporters with both high and low export intensity, but the effect is stronger for persistent export‐intensive small firms.     

Exchange rate disconnect and financial constraints —evidence from Chinese firms

One puzzling observation in international economics is the lack of response of exports to exchange rate fluctuations. Employing the most comprehensive export data from China for the 2000–2007 period, we provide sector- and firm-level evidence that the response of exports to exchange rate movements depends crucially on the level of financial constraints. For sectors with large financial constraints, the response is small, whereas, for less financially constrained sectors, the response can be much larger, with the estimated elasticity decreasing with the sector's degree of financial constraints. At the firm-level, financial constraints affect the firm's response to exchange rate shocks at both the intensive and the extensive margins. At the intensive margin, financial constraints dampen the effect of exchange rate on exports by restricting the firm's export value to the existing destination market; at the extensive margin, financial constraints restrict the number of firms participating in exporting, the number of firm-product pairs being exported, and the probability of entering a new destination market.     

Deconstructing gravity: trade costs and extensive and intensive margins

Abstract This paper uses data on US exports to decompose exports into the number of exporting firms (the extensive margin) and average export sales (the intensive margin). We show how a range of proxies for trade costs has different impacts on the two margins. Distance has a negative effect on both margins, but the magnitude is considerably larger for the extensive margin. Most of the variables capturing language, internal geography, infrastructure and import cost barriers work through the extensive margin. We show that these results are consistent with a Melitz‐style model of trade with heterogeneous firm productivity and fixed costs.     

THE DYNAMIC EFFECTS OF MULTILATERAL TRADE POLICY WITH EXPORT CHURNING

This article examines the relationship between export churning and the aggregate response to trade policy. I show that export churning—the share of bilateral exports by new or exiting exporters—varies systematically across export destinations and build a multicountry model with destination-specific investments in exporting capacity that is consistent with churning patterns. The model then predicts that trade liberalizations with minor export destinations deliver higher bilateral export growth than liberalizations with major export destinations, and the data support this prediction. Furthermore, the aggregate effects of trade policy depend critically on the pattern of export churning in the model.     

Wholesalers in international trade

Recent empirical research in international trade has revealed overwhelming evidence that, in all countries, a remarkably small proportion of firms report exports in Customs statistics. However, a large share of these are wholesalers. This suggests that the number of producers selling their products abroad might be much greater than that suggested by a simple count of the firms directly reporting their exports. This paper sheds light on the role of wholesalers in international trade. Our model uses very general assumptions to show that intermediated exporters may contribute significantly to the extension of countries' export opportunities. The model predicts a twofold role in international trade. First, wholesalers alleviate the difficulty of reaching less-accessible markets. Second, they help less-efficient firms to supply foreign markets, thus increasing the number of exported varieties at the aggregate level. We use French firm-level export data to provide empirical support for these two predictions.     

贸易成本、企业出口动态与出口增长的二元边际-基于中国出口企业微观数据:2000-2005

本文基于企业异质性贸易理论框架,利用中国海关数据从企业层面将中国出口增长分解为扩展边际(出口企业数量)与集约边际(单位企业的平均出口额),描述了中国企业出口动态和二元边际结构,并考察不同贸易成本的作用机制。结果发现,2000—2005年间尽管扩展边际的波动幅度远大于集约边际,中国出口的增长仍大部分是由持续出口企业的贸易额扩大实现的;各种因素对二元边际的作用机制和程度不尽相同,经济规模、距离和贸易成本的变动主要通过扩展边际影响贸易流量。     

Within‐firm wage inequality and firm‐level exports

This paper analyzes changes in within‐firm inequality of hourly wages arising from export shocks to exporting firms in Denmark. We provide causal evidence that export demand shocks increase within‐firm inequality. Decomposing overall inequality into within and between components for occupational and educational groups, the results show that exports lead to a significant increase in within‐group wage inequality but do not affect the between‐group component. We develop a partial equilibrium model, featuring heterogeneous workers, which rationalizes these observations and shows how export demand shocks induce a complementarity effect, leading to increases in wage inequality within firms.     

What explains indirect exports of goods and services in Eastern Europe and Central Asia?

This paper investigates the determinants of indirect exporting, using firm-level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting depends on a combination of fixed and variable trade cost factors. We first hypothesize that firms that perceive customs, transportation, crime and legal systems as severe obstacles anticipate higher fixed costs and are more likely to export indirectly. The second hypothesis is that indirect exporting tends to be a temporary strategy. Econometric models are used to test the first hypothesis and transition matrices to test the second. In particular, probit, Heckman-probit and fractional response models are estimated to analyse the determinants of the export mode and the share of indirect exports. The results indicate that the factors that account for the fixed cost of exporting, mainly affect the decision to export indirectly (extensive margin), but some of them also affect, to a lesser extent, the amount exported indirectly (intensive margin). More specifically, factors such as customs and trade restrictions and transportation obstacles affect the extensive margin only, whereas crime affects both margins. Secondly, trade agreement membership mainly affects trade in manufactured goods, while exchange rate volatility affects positively the extensive and intensive margin of indirect exports of services. The results also indicate that firms are more likely to change their status as an indirect exporter than they are to change their status as a direct exporter or a non-exporter, which provides support to the second hypothesis.     

Domestic and Foreign Price/Marginal-cost Margins: an Application to Spanish Manufacturing Firms

The authors investigate the differences in margins of export and domestic markets for Spanish manufacturing firms in the period 1990 to 1997. They estimate jointly a multiproduct cost function, a variable factor share equation, and two price/marginal‐cost margin equations. The results indicate that the marginal cost of production sold in export markets is slightly greater than in domestic markets. At the same time, the price/marginal‐cost margins in export markets are smaller than in domestic markets. There is also strong evidence that margins are procyclical in domestic markets, but this evidence is less clear in foreign markets.     

Impact of China on trade in electronic products

Using 6-digit product-level data of exports in electronics, this paper finds robust evidence that China's exports adversely affect both the intensive export margin and the extensive export margin of its competitors for the 1992–2018 period. The displacement effects of China's exports on the intensive margin apply especially for the group of intermediate and capital electronic goods and are much more robust and significantly larger in magnitude than the displacement effects found in other studies using aggregated trade data. Finally, we find that China's displacement effect is increasing in China's advantage relative to its competitors in terms of human capital index and internet access of its population.     

Beyond the average effects: The distributional impacts of export promotion programs in developing countries

Do all exporters benefit the same from export promotion programs? Surprisingly, no matter how obvious this question may a priori be when thinking of the effectiveness of these programs, there is virtually no empirical evidence on how they affect export performance in different parts of the distribution of export outcomes. This paper aims at filling this gap in the literature. We assess the distributional impacts of trade promotion activities performing efficient semiparametric quantile treatment effect estimation on assistance, total sales, and highly disaggregated export data for the whole population of Chilean exporters over the 2002-2006 period. We find that these activities have indeed heterogeneous effects over the distribution of export performance, along both the extensive and intensive margins. In particular, smaller firms as measured by their total exports seem to benefit more from export promotion actions.     

Decomposing service exports adjustments along the intensive and extensive margin at the firm‐level

Using a panel data set of Austrian service exporting firms this paper examines the determinants of service exports at the firm/destination country level. We implement a random effects Heckman sample selection firm‐level gravity model as well as a fixed effects Poisson model. Expected firm‐level service exports are decomposed into the intensive and extensive margins of adjustment as a response to counterfactual changes. We find market demand to be a key determinant. Results also suggest high service export potentials due to regulatory reform in partner countries within the EU. Adjustments at the extensive margin only play a marginal role. Increases in firm size as well as changes in distance related costs are most effective in developing new export relationships in services.     

Do domestic firms learn to export from multinationals?

Attracting inward investment is a major preoccupation of policymakers worldwide, and a wide range of instruments, including direct subventions, are deployed to attract multinational enterprises (MNEs). Intervention is predicated on the assumption that there are direct productivity spillovers associated with the presence of MNEs and the policy of attracting them is targeted at capturing these externalities. Yet robust evidence on direct spillovers is hard to find. An underexplored indirect channel for productivity spillovers is via exports. Exporting firms are more productive than nonexporting firms. Thus, if the presence of MNEs results in more indigenous firms exporting, an indirect productivity spillover will result. In this paper, we identify possible transmission mechanisms for export spillovers and test for their existence on a large panel of firms in the UK. Our results confirm positive spillover effects from MNEs on the decision to export of UK-owned firms as well as on their export propensity.     

DECISION TO INVEST ABROAD: THE CASE OF SOUTH KOREAN MULTINATIONALS

Recent firm‐based empirical studies examine whether firms serving foreign markets either through exports or foreign direct investment (FDI) are more efficient than their domestically‐oriented counterparts. The purpose of the present paper is to study the link between performance of multinational firms and the choice to participate in foreign investment. In so doing, this paper explicitly differentiates exports and FDI decisions. Using firm‐level data for large South Korean manufacturing firms, I provide evidence that the premium for FDI is huge compared to exports, and that good firms undertake FDI. Studying performance across firms, I find that firms that engage in FDI outperform other firms in the future in all possible dimensions; they are larger, pay higher wages, and are also more productive. These results are consistent with the hypothesis that good firms self‐select to engage in FDI. I also find clear evidence that past FDI experience has a strong positive effect on the probability of current investment abroad. This implies that the sunk cost involved in FDI plays a role in current decisions to undertake FDI.