A Search and Learning Model of Export Dynamics

Economics

Speaker:David Jinkins, Copenhagen Business School
Date: Friday 7 November 2014
Time: 16.15 - 17.45
Location: Bateman Lecture Theatre, Building One

Further details

Customs record data reveal a number of patterns in relationships Colombian firms have with their U.S. buyers. We interpret these patterns in terms of a continuous-time model in which heterogeneous sellers search for buyers in a market. Success in selling to a buyer reveals information to the seller about the appeal of her product in the market, affecting her incentive to search for more buyers. Fit using the method of simulated moments, the model replicates key patterns in the customs records and allows us quantify several types of trade costs, including the search costs of identifying potential clients and the costs of maintaining business relationships with existing clients. It also allows us to estimate the effect of previous  exporting activity on the costs of meeting new clients, and the characterize the cumulative effects of learning on firm’ search intensities. Finally, we use our fitted model to explore the effects of these trade costs and learning effects on aggregate export dynamics.

A link to the paper can be found here: veryshuai.no-ip.org/research/files/EatonEslavaJinkinsKrizanTybout-ASearchAndLearningModelOfExportDynamics.pdf