Importer Dynamics: Do Peers Matter – Stefanie Haller
Stefanie Haller (University College Dublin)
Few firms import, even when formal trade barriers are low and despite empirical evidence of sizeable potential gains. A likely explanation is that uncertainty and informational frictions impede trade, raising the possibility that new importers are influenced by their local peers' import activity. In this paper, we examine this hypothesis using data on French imports by firm-product-country-year, importers' characteristics, and location. We conduct two types of empirical exercises. First, we examine the decision to start importing as a function of the lagged number of local importers of the same product from the same country. Our estimates suggest that the presence of some peers almost doubles the probability to start importing, and that this effect increases disproportionately with the number of peers. Second, we examine how a `natural experiment' affects the number of import starters at the Commuting Zone (CZ) level: the elimination of textile and clothing quotas under the Multi-Fibre Arrangement (MFA). We find that the number of textile and clothing import starters from quota countries responds systematically to MFA quota elimination in CZs with a higher initial number of peers. .
Gregory Corcos (Ecole polytechnique) — Stefanie Haller (University College Dublin)
Conmference room (A-S25)