Dissecting Trade: Firms, Industries, and Export Destinations

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Empirical Micro Seminar
University of Pennsylvania

3718 Locust Walk
309 McNeil

Philadelphia, PA

United States

Joint with: Jonathan Eaton and Francis Kramarz

We examine entry across 113 national markets in 16 different industries using a comprehensive data
set of French manufacturing firms. The data are unique in indicating how much each firm exports to each destination. Looking across all manufacturers: (1) Firms differ substantially in export participation, with most selling only at home; (2) The number of firms selling to multiple markets falls off with the number of destinations with an elasticity of −2.5; (3) Decomposing French exports
to each destination into the size of the market and French share, variation in market share translates nearly completely into firm entry while about 60 percent of the variation in market size is reflected in firm entry. Looking within each of 16 industries we find little variation in these patterns. We propose that any successful model of trade and market structure must confront these facts.

For more information, contact Jere Behrman.

Samuel Kortum

University of Minnesota

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