Export Decision under Risk

Event Date: 12 November 2014

Speaker: Jose de Sousa, Paris-sud University (with Anne-Celia Disdier and Carl Gaigne)

Abstract : Does demand volatility matter for exports? How do the exporting firms deal with volatile demand? A simple model of risk aversion shows that exporters react to an increase in demand volatility in destination markets by increasing their export prices and decreasing their export volumes.

The theoretical predictions are put to the test by using French firm-level exports across destination markets with different levels of demand volatility. The firm-level results, over the period 1995-2009, are broadly consistent with our theoretical predictions.

Published: 11 February 2015