Decomposing Firm-level Sales Variation
Publikation: Working paper › Forskning
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Decomposing Firm-level Sales Variation. / Munch, Jakob Roland; Nguyen, Daniel Xuyen.
Economic Policy Research Unit. Department of Economics, University of Copenhagen, 2009.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Decomposing Firm-level Sales Variation
AU - Munch, Jakob Roland
AU - Nguyen, Daniel Xuyen
N1 - JEL classification: F12, C24
PY - 2009
Y1 - 2009
N2 - We measure the contribution of firm-specific effects to overall sales variation within a destination and find it remarkably low. Our empirical decomposition is structurally motivated by a heterogeneity model of exporting involving destination-specific, firm-specific, and firm-destination-specific latent effects with incidental truncation. We use a highly detailed dataset with exports by products and destinations for all Danish manufacturing fi…rms. We fi…nd the contribution of firm-specific heterogeneity to within-destination sales variation varies greatly across HS6 products, and that for the median product it drives 31% of the sales variation. When we remove first-time exports from our sample, the median value increases to 40%, implying that firm-destination-specific effects are most important the first year. We conclude that while firm-specific productivity can account for some of the variation, the majority is explained by firm-destination-specific heterogeneity sources such as firm-destination-specific demand.
AB - We measure the contribution of firm-specific effects to overall sales variation within a destination and find it remarkably low. Our empirical decomposition is structurally motivated by a heterogeneity model of exporting involving destination-specific, firm-specific, and firm-destination-specific latent effects with incidental truncation. We use a highly detailed dataset with exports by products and destinations for all Danish manufacturing fi…rms. We fi…nd the contribution of firm-specific heterogeneity to within-destination sales variation varies greatly across HS6 products, and that for the median product it drives 31% of the sales variation. When we remove first-time exports from our sample, the median value increases to 40%, implying that firm-destination-specific effects are most important the first year. We conclude that while firm-specific productivity can account for some of the variation, the majority is explained by firm-destination-specific heterogeneity sources such as firm-destination-specific demand.
KW - Faculty of Social Sciences
KW - Firm heterogeneity
KW - firm-level export data
KW - truncation correction
M3 - Working paper
BT - Decomposing Firm-level Sales Variation
PB - Economic Policy Research Unit. Department of Economics, University of Copenhagen
ER -
ID: 12676798