Firm Export Dynamics and the Geography of Trade

Abstract

Two recent trends in international economics have been an increased focus on the geography of trade (e.g. what factors determine where a country exports to) and the emergence of empirical work examining firm-level data on exporting activity. However, data limitations have prevented there being much progress in combining these two areas, because very few countries provide firm-level data breaking down firm exports by their destination. Eaton, Kortum and Kramarz (2004) have analysed such data for French frms but their study only uses a single cross-section of data. This paper uses a unique survey of Irish exporting firms over a five year period to fill some of the gaps in this empirical literature. With information on over fifty destinations, firm-level changes in market coverage and their contribution to net export growth are investigated. Firm involvement in individual export markets is found to be much more dynamic than export status. Entry and exit to markets is shown to be a quantifiably important component of overall export ows, with this factor becoming more important for less popular markets. The paper also shows how the patterns of entry and exit into export markets combine to determine the overall firm-level distribution of number of markets entered.Firm exports; market entry and exit; transition matrix