Category Archives: Firms

Matched transaction-level trade data

An interesting line of ongoing research pairs transaction-level trade data across countries to provide detailed descriptions of importers, exporters, and their transactional relations. Eaton, Eslava, Krizan, Kugler, and Tybout (in a project titled “A Search and Learning Model of Export Dynamics”, there are various versions, here’s May 2010) have combined 13 years of Colombian export data with US import data, generating many new interesting findings about buyer-seller matches (e.g. “Roughly 80 percent of matches are monogamous in the sense that the buyer deals with only one Colombian exporter and the exporter ships to only one buyer in the United States”). Blum, Claro, and Horstmann have used the other side of the Colombian trade data, studying Chilean-exporter-Colombian-importer pairs. There are also theoretical predictions about international transactional matching that could be tested using such paired data.

In short, this is an exciting new avenue in trade empirics.

Trade-induced learning

The review of trade-induced learning on pages F324 to F332 of this new article by Ronald Mendoza seems like a pretty good introduction to the topic. He covers the empirical literature on firm-level productivity (selection vs learning by exporting), the roles of quality and variety in importing and exporting, the importance of export destinations’ characteristics, and the product space. As with any survey, you’ll have to turn to the underlying papers to get into the methodological issues and strategies.

[HT: Jim]

Why might you want oligopolistic models of trade?

Why might you want oligopolstic models of trade?
“In 2004 Nokia’s share of Finnish GDP was 3.5 per cent and in 2003 it accounted for almost a quarter of Finland’s exports” (Neary, 2010).

“In 2004 Nokia’s share of Finnish GDP was 3.5 per cent and in 2003 it accounted for almost a quarter of Finland’s exports” (Neary, 2010).

De Loecker: “Detecting Learning by Exporting”

This abstract caught my eye:

Learning by exporting refers to the mechanism whereby firms improve their performance (productivity) after entering export markets. Although this mech- anism is often mentioned in policy documents, a significant share of econometric studies has not found evidence for this hypothesis. This has lead to a view that the correlation between firm-level export status and productivity is a result of a self-selection process of more productive firms becoming exporters. This paper shows that the methods used to come to the latter conclusion suffer from a large internal inconsistency: they rely on an exogenous evolving productivity process. I show how recent proxy estimators can easily be accommodated to incorporate the endogenous process of learning by exporting and can detect sig- nificant productivity gains upon export entry. I apply my empirical model to plant-level data and find substantial additional productivity gains (upon export entry) ranging from 4 to 27 percent.