Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/147388 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 6134
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Using firm and industry data, we establish two facts: (i) Uncertainty about demand conditions not only reduces export sales and exporting probabilities but also makes exports less sensitive to trade policy; (ii) the most productive exporters are more affected by higher industry-wide expenditure volatility than the least productive exporters. We rationalize these regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation of export shares from the most to the least productive incumbents. Greater skewness of the demand distribution and/or higher trade cost weaken this effect. Our results hold for a large class of consumer utility functions.
Subjects: 
firm exports
demand uncertainty
risk aversion
expenditure volatility
skewness
JEL: 
D21
D22
F12
F14
Document Type: 
Working Paper
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