The buyer margins of firms' exports

Carballo, Jerónimo, Ottaviano, Gianmarco I. P. and Martincus, Christian Volpe (2018) The buyer margins of firms' exports. Journal of International Economics, 112. pp. 33-49. ISSN 0022-1996

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Abstract

We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter's foreign sales of any product in a given destination are in turn accounted for by a dominant buyer. We propose an analytically solvable multi-country model of endogenous selection in which dominant exporters, dominant products and dominant buyers emerge in parallel as multi-product sellers with heterogeneous technologies compete for buyers with heterogeneous needs. The model not only provides an explanation of the existence of dominant buyers but also makes specific predictions on how the relative importance of dominant buyers should vary across export destinations depending on their market size and accessibility. We show that these predictions are borne out by our data and discuss their welfare implications in terms of gains from trade.

Item Type:	Article
Official URL:	https://www.journals.elsevier.com/journal-of-inter...
Additional Information:	© 2018 Elsevier
Divisions:	Economics Centre for Economic Performance
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	13 Mar 2018 10:14
Last Modified:	11 Dec 2024 21:34
URI:	http://eprints.lse.ac.uk/id/eprint/87084

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