Publication:
Reassessing the link between firm size and exports

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Date
2020-06
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Authors
Hernández Martínez, Pedro Jesús
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Publisher
Springer
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DOI
https://doi.org/10.1007/s40821-019-00126-9
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info:eu-repo/semantics/article
Description
© 2019 Eurasia Business and Economics Society. This document is the Published Manuscript version of a Published Work that appeared in final form in Eurasian Business Review. To access the final edited and published work see https://doi.org/10.1007/s40821-019-00126-9
Abstract
This paper re-examines the link between firm size and exports. The new theories of international trade emphasize firm heterogeneity as the theoretical basis of export behavior. In the context of this heterogeneity, this paper uses the quantile regression methodology to analyze the effects of firm size on firm export propensity (percentage of exported sales). The paper confirms the existence of a positive relationship between firm size and export propensity but finds that the conventional estimates of the elasticity of export propensity with respect to firm size on the average of the export propensities’ distribution underestimate the effect at the bottom of the distribution and overestimate the effect on the rest. Consequently, policies aimed at increasing exports should focus their efforts on increasing the size of those firms with a lower export propensity.
Citation
Eurasian Business Review, 2020, Vol. 10, N. 2, pp. 207-223
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