The Life-Cycle Dynamics of Exporters and Multinational Firms
NBER Working Paper No. 24013
This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). We present a dynamic model of the well-known proximity-concentration tradeoff, which is largely consistent with a set of new facts that we document using rich firm-level data for France and Norway. We use a calibrated version of the model to evaluate the role played by the firm’s choice of becoming an MNE in new exporters’ dynamics. Our main quantitative finding is that MNEs are key for understanding those dynamics: After a trade-liberalization shock, the calibrated model with MNEs triggers much larger responses in life-cycle exit and growth rates for young exporters than the ones in the calibrated model with only exporters. The difference between the two models hinges on the right truncation of fast-growing exporters created by the inclusion of the MNE choice.
Document Object Identifier (DOI): 10.3386/w24013
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