Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173034
Authors: 
Gumpert, Anna
Moxnes, Andreas
Ramondo, Natalia
Tintelnot, Felix
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper No. 6758
Abstract: 
This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). We present a dynamic model of trade and MNE activity in which the mode of serving a market depends on the well-known proximity-concentration tradeoff. We show that the option of performing MNE activities in the model produces life-cycle patterns for exporters that differ from those in an export-only model. Calibrating our model to rich firm-level data from France and Norway, our main quantitative finding is that a reduction in trade costs triggers much larger responses in growth rates and exit rates, for young exporters, in the model with MNEs than in the model without MNEs. We also show that the model is largely consistent with a set of new facts on the joint life-cycle dynamic behavior of exporters and MNEs.
Subjects: 
international trade
exporters
multinational firm
Markov process
sunk cost
proximity-concentration tradeoff
trade liberalization
JEL: 
F10
F20
Document Type: 
Working Paper

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