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David Rivers (Western Ontario)

10 April 2019 @ 12:45 - 13:45


  • Past event


10 April 2019
12:45 - 13:45
Event Category:
Academic Events

“The ABCs of Firm Heterogeneity: The Effects of Demand and Cost Differences on Exporting”

Abstract: We develop a novel methodology for disentangling the demand and cost drivers of firm heterogeneity. Our specific focus is on export status differences, and we utilize a new data set containing firm-product information on prices and quantities sold in the domestic and each export market. Our methodology allows us to jointly estimate firm-level productivity and markups in every market while imposing no functional form restrictions on demand.
We find that i) exporters have thicker domestic markets than non-exporters; ii) this advantage translates to foreign markets; and iii) while all firms face a trade-off between lowering costs and enhancing demands, export firms achieve demand increases with much less loss in productivity.