Abstract
Motivated by empirical evidence I uncover on the dynamics of French firms exports, I offer a novel theory of trade frictions. Firms only export into markets where they have a contact. They directly search for new trading partners, but also use their exist- ing network of contacts to remotely search for new partners. I characterize the dynamic formation of an international network of exporters in this model. I structurally estimate this model on French data and confirm its predictions regarding (i) the cross- sectional distribution of the number of foreign markets accessed by exporters and (ii) the cross-sectional geographic distribution of exports.
JEL codes
- C15: Statistical Simulation Methods: General
- D85: Network Formation and Analysis: Theory
- F1: Trade
Reference
Thomas Chaney, “The Network Structure of International Trade”, American Economic Review, vol. 104, n. 11, November 2014, pp. 3600–3634.
See also
Published in
American Economic Review, vol. 104, n. 11, November 2014, pp. 3600–3634