Working Paper: CEPR ID: DP2560
Authors: Alessandro Nicita; Marcelo Olarreaga
Abstract: Exporters? performance in a particular market may affect their future exports to the rest of the world. Importers may base their future transaction decisions upon the information revealed by exporters? past performance in other countries. Similarly, exporters acquire valuable information on foreign consumer tastes, product standards or customs administration that may profitably be used in future transactions with other countries. This paper estimates the large effects of these information spillovers across markets on the export patterns of four developing countries (Egypt, Korea, Malaysia and Tunisia). A dollar increase in exports to the United States generates on average an extra 2 to 14 cents of exports to the rest of the world in the next period. Social and ethnic networks seem to reinforce these information spillovers, especially in developing countries, where they appear to be geographically more concentrated. The exception is China and to some extent Hong Kong, probably reflecting a geographically more diversified migration pattern.
Keywords: Developing Countries; Export; Information Spillovers
JEL Codes: F10; F13; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Korean exports to the United States (F10) | Korean exports to the rest of the world (F10) |
| Malaysian exports to the United States (F14) | Malaysian exports to other countries (F10) |
| Egyptian exports to the United States (F10) | Egyptian exports to other countries (F10) |
| Tunisian exports to the United States (F10) | Tunisian exports to other countries (F10) |
| Export performance in one market (F10) | future export patterns in other markets (F10) |