TY - JOUR AU - Eaton,Jonathan AU - Kortum,Samuel AU - Kramarz,Francis TI - An Anatomy of International Trade: Evidence from French Firms JF - National Bureau of Economic Research Working Paper Series VL - No. 14610 PY - 2008 Y2 - December 2008 UR - http://www.nber.org/papers/w14610 L1 - http://www.nber.org/papers/w14610.pdf N1 - Author contact info: Jonathan Eaton Department of Economics Penn State University 608 Kern Graduate Building University Park, PA 16802-3306 Tel: (814) 865 - 8871 Fax: (814) 863 - 4775 E-Mail: jxe22@psu.edu Samuel S. Kortum Department of Economics University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-8251 Fax: 773/702-8490 E-Mail: kortum@uchicago.edu Francis Kramarz CREST-INSEE 15 blvd Gabriel Peri Malakoff CEDEX, 92245 FRANCE E-Mail: kramarz@ensae.fr AB - We examine the sales of French manufacturing firms in 113 destinations, including France itself. Several regularities stand out: (1) the number of French firms selling to a market, relative to French market share, increases systematically with market size; (2) sales distributions are very similar across markets of very different size and extent of French participation; (3) average sales in France rise very systematically with selling to less popular markets and to more markets. We adopt a model of firm heterogeneity and export participation which we estimate to match moments of the French data using the method of simulated moments. The results imply that nearly half the variation across firms that we see in market entry can be attributed to a single dimension of underlying firm heterogeneity, efficiency. Conditional on entry, underlying efficiency accounts for a much smaller variation in sales in any given market. Parameter estimates imply that fixed costs eat up a little more than half of gross profits. We use our results to simulate the effects of a counterfactual decline in bilateral trade barriers on French firms. While total French sales rise by around US$16 billion, sales by the top decile of firms rise by nearly US$23 billion. Every lower decile experiences a drop in sales, due to selling less at home or exiting altogether. ER -