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Hierarchy of Trade and Sequential Exporting

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  • Vincent Boitier
  • Antoine Vatan

Abstract

Export destination baskets of exporting firms do not seem to follow the hierarchy predicted by heterogeneous firms models. Existing literature reconciles theory and data by incorporating additional components of heterogeneity. We first show that we do not need these components to bridge the gap between data and theory. We highlight a strong correlation between the respect of hierarchy and the age of the firm. Without taking into account the age of firms, what we observe in the data is not a drawback but a snapshot of the convergence toward theory's prediction. Second, we develop a simple dynamic model that features this convergence. Our theoretical argument is based upon sequential exporting (choosing one destination at a time) and upon a baseline trade-off between attractiveness and competition.

Suggested Citation

  • Vincent Boitier & Antoine Vatan, 2017. "Hierarchy of Trade and Sequential Exporting," Working Papers 2017-22, CEPII research center.
    • Handle: RePEc:cii:cepidt:2017-22
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    References listed on IDEAS

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    Cited by:

    1. Boitier, Vincent, 2022. "Why do similar firms export differently?," Research in Economics, Elsevier, vol. 76(4), pages 373-385.

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    More about this item

    Keywords

    Export Choice; Dispersion in Strategies; Experience as Exporter; Sequential Exporting;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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