Entrepreneurship and the extensive margin in export growth : a microeconomic accounting of Costa Rica's export growth during 1997-2007

The literature on the correlation between exports and economic development runs deep into the history of economic thought and permeates policy debates. This paper studies the microeconomic structure of export growth in Costa Rica, with special emphasis on the extensive margin of trade, encompassing new exporting firms, new products, and new export markets, as well as the unit values of new versus incumbent products. The data suggest that few new firms survive the test of exporting -- more than 40 percent of firms exit export activities after one year -- and this firm turnover is associated with a steady deterioration of export unit values (prices). Furthermore, most new export products are associated with product switching by incumbent exporting firms. The typical new product introduced by incumbent firms tended to be priced at about 90 percent of the unit values of incumbent products. In contrast, the usual suspected obstacles to export growth, such as the inability of small firms to enter exporting activities or to grow their exports, appear to be important sources of export growth. In fact, the smallest exporting firms experienced the fastest growth in their export values. Some of these results are compared with those from other countries that have been examined in related literature.Economic Theory&Research,Markets and Market Access,Airports and Air Services,Microfinance,Tax Law

A Structural Model of Demand, Cost, and Export Market Selection for Chinese Footwear Producers

In this paper we use micro data on both trade and production for a sample of large Chinese manufacturing firms in the footwear industry from 2002-2006 to estimate an empirical model of export demand, pricing, and market participation by destination market. We use the model to construct indexes of firm-level demand, cost, and export market profitability. The empirical results indicate substantial firm heterogeneity in both the demand and cost dimensions with demand being more dispersed. The firm-specific demand and cost components are very useful in explaining differences in the extensive margin of trade, the length of time a firm exports to a destination, and the number and mix of destinations, as well as the export prices, while cost is more important in explaining the quantity of firm exports on the intensive margin. We use the estimates to analyze the reallocation resulting from removal of the quota on Chinese footwear exports to the EU and find that it led to a rapid restructuring of export supply sources in favor of firms with high demand and low cost indexes.

Entry, exit and the determinants of market structure

Market structure is determined by the entry and exit decisions of individual producers. These decisions are driven by expectations of future profits which, in turn, depend on the nature of competition within the market. In this paper we estimate a dynamic, structural model of entry and exit in an oligopolistic industry and use it to quantify the determinants of market structure and long-run firm values for two U.S. service industries, dentists and chiropractors. We find that entry costs faced by potential entrants, fixed costs faced by incumbent producers, and the toughness of short-run price competition are all important determinants of long run firm values and market structure. As the number of firms in the market increases, the value of continuing in the market and the value of entering the market both decline, the probability of exit rises, and the probability of entry declines. The magnitude of these effects differ substantially across markets due to differences in exogenous cost and demand factors and across the dentist and chiropractor industries. Simulations using the estimated model for the dentist industry show that pressure from both potential entrants and incumbent firms discipline long-run profits. We calculate that a seven percent reduction in the mean sunk entry cost would reduce a monopolist's long-run profits by the same amount as if the firm operated in a duopoly.Markets ; Competition ; Service industries

Finance and Misallocation: Evidence from Plant-level Data

We study a model of industry dynamics in which idiosyncratic risk is uninsurable and establishments are subject to a financing constraint. We ask: does the model, when parameterized to match salient characteristics of plant-level data (Colombia and South Korea), predict large aggregate TFP losses from misallocation of factors across productive units? Our answer is: no. We estimate financing frictions that are fairly large: one-half of the establishments in both countries are constrained and face an external finance premium of 5% on average. Efficient establishments are, nonetheless, able to accumulate internal funds and quickly grow out of their borrowing constraints. Parameterizations of the model that hinder this process of internal accumulation can, in principle, cause very large TFP losses. Such parameterizations are, however, at odds with important features of plant-level data, most notably the difference in returns to factors across establishments that expand/contract (young vs. old) and the variability and persistence of plant-level sales.

Competitors, Complementors, Parents and Place: Explaining Regional Agglomeration in the U.S. Auto Industry

Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts

Metabolite concentrations, fluxes and free energies imply efficient enzyme usage.

In metabolism, available free energy is limited and must be divided across pathway steps to maintain a negative ΔG throughout. For each reaction, ΔG is log proportional both to a concentration ratio (reaction quotient to equilibrium constant) and to a flux ratio (backward to forward flux). Here we use isotope labeling to measure absolute metabolite concentrations and fluxes in Escherichia coli, yeast and a mammalian cell line. We then integrate this information to obtain a unified set of concentrations and ΔG for each organism. In glycolysis, we find that free energy is partitioned so as to mitigate unproductive backward fluxes associated with ΔG near zero. Across metabolism, we observe that absolute metabolite concentrations and ΔG are substantially conserved and that most substrate (but not inhibitor) concentrations exceed the associated enzyme binding site dissociation constant (Km or Ki). The observed conservation of metabolite concentrations is consistent with an evolutionary drive to utilize enzymes efficiently given thermodynamic and osmotic constraints

Ultrathin Acoustic Parity-Time Symmetric Metasurface Cloak

Invisibility or unhearability cloaks have beenmade possible by using metamaterials enabling light or sound to flow around obstacle without the trace of reflections or shadows. Metamaterials are known for being flexible building units that can mimic a host of unusual and extreme material responses, which are essential when engineering artificial material properties to realize a coordinate transforming cloak. Bending and stretching the coordinate grid in space require stringent material parameters; therefore, small inaccuracies and inevitablematerial losses become sources for unwanted scattering that are decremental to the desired effect.These obstacles further limit the possibility of achieving a robust concealment of sizeable objects from either radar or sonar detection. By using an elaborate arrangement of gain and lossy acousticmedia respecting parity-time symmetry, we built a one-way unhearability cloak able to hide objects seven times larger than the acoustic wavelength. Generally speaking, our approach has no limits in terms of working frequency, shape, or size, specifically though we demonstrate how, in principle, an object of the size of a human can be hidden from audible sound