University College Dublin
School of Economics
Institutional Affiliation: University College Dublin
Information about this author at RePEc
NBER Working Papers and Publications
|January 2016||How Exporters Grow|
with Doireann Fitzgerald, Yaniv Yedid-Levi: w21935
We show that in successful episodes of export market entry, there are statistically and economically significant post-entry dynamics of quantities, but no post-entry dynamics of markups. This suggests that shifts in demand play an important role in successful entry, but that firms do not use dynamic manipulation of markups as an instrument to shift demand. We structurally estimate two competing models of customer base accumulation to match these moments. In the first model, firms use marketing and advertising to acquire new customers and thereby shift demand and increase sales. In the second, they use temporarily low markups to do so. The marketing and advertising model fits the quantity and markup moments well, and implies that successful entry is associated with high selling expenses. Th...
|March 2014||Exporters and Shocks: Dissecting the International Elasticity Puzzle|
with Doireann Fitzgerald: w19968
We use micro data for Ireland to estimate how export participation and the export revenue of incumbent exporters respond to tariffs and real exchange rates. Both participation and revenue, but especially revenue, are more responsive to tariffs than to real exchange rates. Our estimates translate into an elasticity of aggregate exports with respect to tariffs of between -3.8 and -5.4, and with respect to real exchange rates of between 0.45 and 0.6, consistent with estimates in the literature based on aggregate data. We argue that forward-looking investment in customer base combined with the fact that tariffs are much more predictable than real exchange rates can explain why export revenue responds so much more to tariffs.
Published: Doireann Fitzgerald & Stefanie Haller, 2018. "Exporters and Shocks," Journal of International Economics, .