Demand learning and firm dynamics: evidence from exporters

Berman, Nicolas, Rebeyrol, Vincent and Vicard, Vincent (2019) Demand learning and firm dynamics: evidence from exporters. Review of Economics and Statistics, 101 (1). pp. 91-106.

[img]
Preview
Text
Download (819kB) | Preview
Official URL: http://tse-fr.eu/pub/32438

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: Article
Language: English
Date: March 2019
Refereed: Yes
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)
Site: UT1
Date Deposited: 22 May 2018 08:57
Last Modified: 23 May 2019 12:54
OAI ID: oai:tse-fr.eu:32438
URI: http://publications.ut-capitole.fr/id/eprint/25837

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year