Demand uncertainty: Exporting delays and exporting failures

• 成果类型: Article
• 署名作者: Nguyen, Daniel X.
• 署名单位: University of Copenhagen
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.10.007
• 发表日期: 2012
• 页码: 336-344
• 关键词: Firm heterogeneity; trade failures; exporting delay

摘要

This paper presents a model of trade that explains why firms wait to export and why many exporters fail. Firms face uncertain demands that are only realized after the firm enters the destination. The model retools the timing, of the resolution of uncertainty found in models with heterogeneity of firm productivity. This retooling addresses several shortcomings. First, the imperfect correlation of demands reconciles the sales variation observed in and across destinations. Second, since demands for the firm's output are correlated across destinations, a firm can use previously realized demands to forecast unknown demands in untested destinations. The option to forecast demands causes firms to delay exporting in order to gather more information about foreign demand. Third, since uncertainty is resolved after entry, many firms enter a destination and then exit after learning that they cannot profit. This prediction reconciles the high rate of exit seen in the first years of exporting. Finally, when faced with multiple destinations to which they can export, many firms will choose to sequentially export in, order to slowly learn more about its chances for success in untested markets. (C) 2011 Elsevier B.V. All rights reserved.