Demand learning and firm dynamics: evidence from exporters

Berman, Nicolas, Rebeyrol, Vincent and Vicard, Vincent (2017) Demand learning and firm dynamics: evidence from exporters. TSE Working Paper, n. 17-871, Toulouse

[img]
Preview
Text
Download (819kB) | Preview
Official URL: http://tse-fr.eu/pub/32281

Abstract

This paper provides direct evidence that learning about demand is an important driver of firms' dynamics. We present a model of Bayesian learning in which firms are uncertain about their idiosyncratic demand in each of the markets they serve, and update their beliefs as noisy information arrives. Firms are predicted to update more their beliefs to a given demand shock, the younger they are. We test and empirically confirm this prediction, using the structure of the model together with exporter-level data to identify idiosyncratic demand shocks and the firms' beliefs about future demand. Consistent with the theory, we also find that the learning process is weaker in more uncertain environments.

Item Type: Monograph (Working Paper)
Language: English
Date: December 2017
Place of Publication: Toulouse
Uncontrolled Keywords: firm growth, belief updating, demand, exports, uncertainty
JEL codes: D83 - Search; Learning; Information and Knowledge; Communication; Belief
F14 - Country and Industry Studies of Trade
L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Apr 2018 08:05
Last Modified: 17 Apr 2018 08:05
OAI ID: oai:tse-fr.eu:32281
URI: http://publications.ut-capitole.fr/id/eprint/25788

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year