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Berman, Nicolas, Rebeyrol, Vincent
and Vicard, Vincent
(2017)
Demand learning and firm dynamics: evidence from exporters.
TSE Working Paper, n. 17-871, Toulouse
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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 Classification: | 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: | 29 Nov 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:32281 |
| URI: | https://publications.ut-capitole.fr/id/eprint/25788 |
