Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms

Paulo Santos Monteiro; Luciana Juvenal

Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms

Economics

Research output: Working paper › Discussion paper

Abstract

This paper examines the relationship between trade and investment in technology
adoption when firms face demand uncertainty. Our model predicts that, for a given
overall market size, exporting to several countries reduces firms’ demand uncertainty and, hence, raises incentives to invest in productivity improvements. The effects of diversification are heterogeneous across firms: An additional foreign market matters more for firms exporting to fewer destinations. We test the proposed theory using a large sample of Argentinean manufacturing exporters. The predictions of the model find strong support in the data.

Original language	English
Publication status	Unpublished - Apr 2013

Access to Document

http://www-users.york.ac.uk/~psm509/Diversification&ProductivityApril2013.pdf

2 Conference participation
1 Government

European Trade Study Group
Paulo Santos Monteiro (Participant)
12 Sept 2013
Activity: Participating in or organising an event › Conference participation
Annual Meeting of the European Economic Association
Paulo Santos Monteiro (Participant)
27 Aug 2013
Activity: Participating in or organising an event › Conference participation
Federal Reserve Bank of Saint Louis
Paulo Santos Monteiro (Visitor)
May 2009
Activity: Visiting an external institution › Government

Cite this

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title = "Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms",

abstract = "This paper examines the relationship between trade and investment in technologyadoption when firms face demand uncertainty. Our model predicts that, for a givenoverall market size, exporting to several countries reduces firms{\textquoteright} demand uncertainty and, hence, raises incentives to invest in productivity improvements. The effects of diversification are heterogeneous across firms: An additional foreign market matters more for firms exporting to fewer destinations. We test the proposed theory using a large sample of Argentinean manufacturing exporters. The predictions of the model find strong support in the data.",

author = "{Santos Monteiro}, Paulo and Luciana Juvenal",

year = "2013",

month = apr,

language = "English",

type = "WorkingPaper",

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T1 - Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms

AU - Santos Monteiro, Paulo

AU - Juvenal, Luciana

PY - 2013/4

Y1 - 2013/4

N2 - This paper examines the relationship between trade and investment in technologyadoption when firms face demand uncertainty. Our model predicts that, for a givenoverall market size, exporting to several countries reduces firms’ demand uncertainty and, hence, raises incentives to invest in productivity improvements. The effects of diversification are heterogeneous across firms: An additional foreign market matters more for firms exporting to fewer destinations. We test the proposed theory using a large sample of Argentinean manufacturing exporters. The predictions of the model find strong support in the data.

AB - This paper examines the relationship between trade and investment in technologyadoption when firms face demand uncertainty. Our model predicts that, for a givenoverall market size, exporting to several countries reduces firms’ demand uncertainty and, hence, raises incentives to invest in productivity improvements. The effects of diversification are heterogeneous across firms: An additional foreign market matters more for firms exporting to fewer destinations. We test the proposed theory using a large sample of Argentinean manufacturing exporters. The predictions of the model find strong support in the data.

M3 - Discussion paper

BT - Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms

ER -

Export Market Diversification and Productivity Improvements: Theory and Evidence From Argentinean Firms

Abstract

Access to Document

Activities

European Trade Study Group

Annual Meeting of the European Economic Association

Federal Reserve Bank of Saint Louis

Cite this