The Role of Extensive and Intensive Margins and Export Growth / Tibor Besedes, Thomas J. Prusa.

Format:

Book

Author/Creator:

Besedes, Tibor.

Contributor:

National Bureau of Economic Research.

Prusa, Thomas J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13628.

NBER working paper series no. w13628

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

We investigate and compare countries' export growth based on their performance at the extensive and intensive export margins. Our empirical approach is motivated by an extension to the Melitz (2003) model of heterogeneous firms in which exporters are subject to a one-time sunk cost and also a per-period fixed cost. With imperfect information a firm may enter export markets but shortly exit when it learns its per- period fixed costs. We apply this insight to disaggregated export data and confirm that indeed most export relationships are very short lived. We then show that the survival issue is a significant factor in explaining differences in long run export performance. We find that developing countries would experience significantly higher export growth if they were able to improve their performance with respect to the two key components of the intensive margin: survival and deepening.

Notes:

Print version record

November 2007.