Firm strategies in expanding and diversifying exports

July 26, 2018 | Journal Article

World Economy Cover Authors: Martina Lawless , Iulia Siedschlag , Zuzanna Studnicka
World Economy

This paper provides novel empirical evidence on the patterns and dynamics of exports by Irish firms over the past two decades from a highly detailed data set of export records at the firm‐product‐destination level. We identify patterns of export concentration and specialisation and how these evolved over time. Firms’ strategies for export growth along product and destination markets mixes are then examined and the contributions of intensive (average sales) and extensive (number of products or markets) margins to overall exports and to export growth are calculated. We find that most exporting firms are quite small, selling a few products to a small number of destinations while export values are dominated by a relatively small group of highly globalised large firms selling many products to many destinations. Continuing exporters frequently introduce new products, drop products and enter and exit markets. Export growth in the case of Irish‐owned exporters appears largely driven by the extensive margin of product and destination changes. However, the opposite pattern holds for foreign‐owned firms with growth mainly coming from the intensive margin.

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