Decomposing Firm-Level Sales variation

Jakob Roland Munch; Daniel Xuyen Nguyen

doi:10.1016/j.jebo.2014.06.012

Decomposing Firm-Level Sales variation

10 Citations (Scopus)

Abstract

Recently, much of the trade literature has been focused on using firm-specific productivity to explain export heterogeneity. This study provides evidence for the importance of incorporating firm-destination-specific effects such as demand shocks in theories of exporter heterogeneity. Our study estimates the proportion of firm-level sales variation within a product-destination market that can be explained by firm-specific effects such as productivity. We use a highly detailed dataset comprising firm-product-destination-specific exports and correct for truncation as modeled by recent trade theories. We find that the contribution of firm-specific effects varies greatly across products and that it is 45% for the median product. That is, within-destination sales variation is primarily explained by firm-destination-specific heterogeneity for the majority of products.

Original language	English
Journal	Journal of Economic Behavior & Organization
Volume	106
Pages (from-to)	317–334
ISSN	0167-2681
DOIs	https://doi.org/10.1016/j.jebo.2014.06.012
Publication status	Published - Oct 2014

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title = "Decomposing Firm-Level Sales variation",

abstract = "Recently, much of the trade literature has been focused on using firm-specific productivity to explain export heterogeneity. This study provides evidence for the importance of incorporating firm-destination-specific effects such as demand shocks in theories of exporter heterogeneity. Our study estimates the proportion of firm-level sales variation within a product-destination market that can be explained by firm-specific effects such as productivity. We use a highly detailed dataset comprising firm-product-destination-specific exports and correct for truncation as modeled by recent trade theories. We find that the contribution of firm-specific effects varies greatly across products and that it is 45% for the median product. That is, within-destination sales variation is primarily explained by firm-destination-specific heterogeneity for the majority of products.",

author = "Munch, {Jakob Roland} and Nguyen, {Daniel Xuyen}",

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AU - Nguyen, Daniel Xuyen

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PY - 2014/10

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N2 - Recently, much of the trade literature has been focused on using firm-specific productivity to explain export heterogeneity. This study provides evidence for the importance of incorporating firm-destination-specific effects such as demand shocks in theories of exporter heterogeneity. Our study estimates the proportion of firm-level sales variation within a product-destination market that can be explained by firm-specific effects such as productivity. We use a highly detailed dataset comprising firm-product-destination-specific exports and correct for truncation as modeled by recent trade theories. We find that the contribution of firm-specific effects varies greatly across products and that it is 45% for the median product. That is, within-destination sales variation is primarily explained by firm-destination-specific heterogeneity for the majority of products.

AB - Recently, much of the trade literature has been focused on using firm-specific productivity to explain export heterogeneity. This study provides evidence for the importance of incorporating firm-destination-specific effects such as demand shocks in theories of exporter heterogeneity. Our study estimates the proportion of firm-level sales variation within a product-destination market that can be explained by firm-specific effects such as productivity. We use a highly detailed dataset comprising firm-product-destination-specific exports and correct for truncation as modeled by recent trade theories. We find that the contribution of firm-specific effects varies greatly across products and that it is 45% for the median product. That is, within-destination sales variation is primarily explained by firm-destination-specific heterogeneity for the majority of products.

U2 - 10.1016/j.jebo.2014.06.012

DO - 10.1016/j.jebo.2014.06.012

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VL - 106

SP - 317

EP - 334

JO - Journal of Economic Behavior & Organization

JF - Journal of Economic Behavior & Organization

ER -

Decomposing Firm-Level Sales variation

Abstract

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