The life-cycle dynamics of exporters and multinational firms
Files
First author draft
Date
2020-09
Authors
Gumpert, Anna
Li, Haishi
Moxnes, Andreas
Ramondo, Natalia
Tintelnot, Felix
Version
OA Version
Published version
Citation
Anna Gumpert, Haishi Li, Andreas Moxnes, Natalia Ramondo, Felix Tintelnot. 2020. "The life-cycle dynamics of exporters and multinational firms." Journal of International Economics, Volume 126, pp. 103343 - 103343. https://doi.org/10.1016/j.jinteco.2020.103343
Abstract
This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). Using rich firm-level data, we document a comprehensive set of facts on entry, exit, and growth of new exporters and new MNEs. Guided by these facts, we build a model based on the standard proximity-concentration trade-off extended to incorporate time-varying firm productivity and sunk costs of MNE entry. The calibrated version of the model goes far in matching cross-sectional and dynamic moments of the data on exporters and MNEs. Our results point to much higher sunk costs for MNE than for export activities. Finally, we show how including the choice to become an MNE affects the predicted export dynamics after a trade liberalization episode.