The role of firm-to-firm relationships in exporter dynamics

Rigo, Davide ORCID: 0000-0003-0663-7806 (2024) The role of firm-to-firm relationships in exporter dynamics. Economica, 91 (362). 569 - 587. ISSN 0013-0427

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Abstract

This paper investigates the role of firm-to-firm relationships in export market dynamics, documenting the following stylized facts for French exporters. First, exporters grow in a foreign market by expanding their customer base; the average French exporter doubles its number of buyers after 8 years. Second, sales to existing customers remain the predominant source of growth in a foreign market, with long-lasting relationships contributing to most export values. Third, as a mechanism driving firms' growth in a relationship, prices fall as a relationship ages. Fourth, I exploit the Brexit referendum as a quasi-natural experiment to examine how firm-to-firm relationships adjust in response to changes in market access. I find that French exporters with long-lasting relationships in the UK are less affected by the referendum shock and exhibit higher exchange rate pass-through. Overall, these findings indicate that long-lasting relationships represent a crucial margin for export market growth and in shielding exporters from changing market conditions.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14680335
Additional Information:	© 2024 The Authors
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General
Date Deposited:	03 Jan 2024 10:33
Last Modified:	15 Nov 2024 02:09
URI:	http://eprints.lse.ac.uk/id/eprint/121135

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