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The Mutable Geography of Firms’ International Trade

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  • Lu Han

Abstract

Exporters frequently change their set of destination markets. This paper proposes a new approach to identifying the underlying drivers of changes in exporters’ market decisions over time. The approach exploits information on the price and quantity of the changes in firms’ continuing markets, to uncover the microshocks that drive firms’ market changes. Applying the method to customs data from China (2000-2006) and the UK (2010-2016), I find consistent results showing that most firm- and firm-product-level market changes are driven by demand-related shocks, with a nontrivial proportion of these changes being correlated across markets.

Suggested Citation

  • Lu Han, 2025. "The Mutable Geography of Firms’ International Trade," Staff Working Papers 25-11, Bank of Canada.
    • Handle: RePEc:bca:bocawp:25-11
    DOI: 10.34989/swp-2025-11
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    More about this item

    Keywords

    International topics; Economic models; Firm dynamics; Trade integration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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