The dynamics of importer-exporter connections. European Economic Review, 2024. [Working Paper / Journal]
Abstract: This paper studies the dynamics of importer–exporter connections when importers source inputs from multiple exporters. I first develop a trade model in which heterogeneous importers invest in expanding the set of potential exporters they know and from which they can source. The model delivers three novel predictions. The lower the degree of substitutability among final goods and the higher the degree of substitutability among inputs of an importer: (i) the lower the growth rate in importer’s connections, (ii) the more likely are connections to be discontinued, and (iii) the lower the trade value growth per surviving connection. I then provide evidence in favour of these predictions by using customs transaction data from Colombia. Finally, I show that the mechanism unveiled in this paper matters for the heterogeneity of the trade adjustment to macroeconomic shocks across sectors.
Abstract: New importers source only a small share of their intermediate inputs abroad and expand this share over time. However, a model of multi-input firms with an import entry cost and stochastic import costs cannot replicate these dynamics. I show that an extended model can be reconciled with the data. I calibrate both models and use them to identify the effects of trade liberalization. The simulations show that a decrease in import prices with the new importer dynamics generates lower aggregate welfare gains, but these gains are more widespread across firms.
Uncertainty and the Choice of Transport Mode: How German Exporters Adjusted to Uncertainty Caused by the Brexit Referendum (With Holger Görg, Zhan Qu, and Horst Raff). December 2024
Abstract: We use newly available firm-level German customs data to study how uncertainty in the export market shapes the way firms supply that market. Specifically, we look at how exporters decide on i) how to transport their goods (the transport mode), ii) how often to ship their goods (the shipment frequency), and iii) the size of their shipments (the shipment intensity). We identify the effects of uncertainty by leveraging a quasi-natural experiment, namely the increase in market uncertainty associated with the so-called Brexit referendum in 2016 that paved the way to the United Kingdom's eventual exit from the European Union. We find that German exporters reacted to this uncertainty shock by increasing their shipment frequency and using faster transport to reach the UK market while decreasing shipment intensity. These effects tend to be stronger for goods that are more inventory-intensive.
One-Off Exporting: New Evidence from Colombian Data (With Ingo Geishecker and Allan Sørensen). July 2025
Abstract: One-off export events, i.e., single-month episodes with positive exports centred in a 49-month window of no exports, are the outcome of more than 50 percent of new export spells at the firm-buyer-destination-product level in Colombian data from 2010-2017. This paper explores the phenomenon of one-off exporting. It proposes a theoretical framework for one-off export events, building on concepts of passive exporting and unsolicited export orders, and based on 185,871 new export spells, it explores what can and cannot explain whether a new export spell is one-off using a non-linear probability model with high-dimensional fixed effects. The paper complements – finding similar results – and extends the finding of a high prevalence of one-off export events in Danish data by Geishecker et al. (2019) as it builds on more granular monthly trade data (accounting for buyer identity) and by showing that relevant firm-level export experience as well as the import pattern of the buyer matter for whether an export spell is one-off.
Management Practices, Competition, and Multi-Product Firms in Developing Countries (with Alina Mulyukova). September 2025
Abstract: We study how liberalization and competition affect firms’ output and product scope depending on management practices. In a model of multi-product firms, we show that firms with better management practices specialize in fewer products with lower marginal costs. The model predicts that, under increased competition, firms with better management practices are less adversely affected by competition, especially in heterogeneous sectors. Evidence from India’s de-reservation policy supports these predictions. Our simulations estimate a 0.29% welfare gain in India from the policy. The same policy could increase welfare by 0.39% in an environment with better management practices, such as the US, highlighting the management practices’ role in liberalization outcomes.
Demand uncertainty in foreign markets. Learning from competitors and sequential market entry (With Leandro Navarro).
Abstract: Firms face uncertainty about their residual demand when deciding whether to enter new export markets. We develop a model where firms with heterogeneous quality face uncertainty about consumers' appeal for quality in unexplored foreign markets, translating into uncertainty on their residual demand and export potential. Firms can progressively learn about their export potential in these markets by observing and interacting with their competitors in the domestic market and third foreign markets. We analyse the relevance of the different learning mechanisms for firms' entry decisions into new export markets and characterise the firms' entry dynamics into new foreign markets and the respective sectoral equilibrium path. Using customs data from Colombia, Chile, and Paraguay, we estimate the model parameters and provide a quantitative analysis.