American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
An Empirical Dynamic Model of Trade with Consumer Accumulation
American Economic Journal: Microeconomics
vol. 13,
no. 4, November 2021
(pp. 23–63)
Abstract
This paper develops a dynamic structural model of trade in which firms slowly accumulate consumers in foreign markets. Estimating the model using export data from individual firms and a particle Markov chain Monte Carlo estimator, the model predicts lower survival rates for new exporters and estimates low entry costs of exporting—less than half of those estimated in the absence of consumer accumulation. Using simulations and out-of-sample predictions, I show that the introduction of such frictions and the reduction in estimated entry costs allow the model to match important facts regarding the aggregate response of international trade to shocks.Citation
Piveteau, Paul. 2021. "An Empirical Dynamic Model of Trade with Consumer Accumulation." American Economic Journal: Microeconomics, 13 (4): 23–63. DOI: 10.1257/mic.20190051Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 Empirical Studies of Trade
- L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
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