Sequentially exporting products across countries

• Published in: Journal of international economics 2023-05, Vol.142, p.103735, Article 103735
• Main Authors: Albornoz, Facundo, Calvo Pardo, Héctor F., Corcos, Gregory, Ornelas, Emanuel
• Format: Article
• Language: English
• Subjects: Experimentation; Export dynamics; Market interdependence; Multiproduct firms; Uncertainty
• ISSN: 0022-1996; 1873-0353
• DOI: 10.1016/j.jinteco.2023.103735

Exploiting disaggregated data on French exporters, we show that firms expand their product scope and geographical presence sequentially. This process of internationalization is uneven over time, exhibiting more volatility early than later in the life cycle of exporters. Specifically, young exporters are particularly likely to exit, and if they keep exporting, to expand at the intensive and sub-extensive margins, doing so by widening product scope within a destination before entering new destinations. We also find that firms' core products are particularly resilient despite being used to “test the waters” when entering additional countries. Existing models of firm export dynamics are not designed to explain these empirical regularities. We argue that they can be rationalized by a mechanism where new exporters are uncertain about the profitability of their products in different markets, but learn from their initial export experiences and then adjust their sales, number of products and destination countries accordingly. •Exporters expand their product scope and geographical presence sequentially.•Expansion, as well as exit, is more likely right after a firm starts to export.•Firms often widen product scope within a destination before entering new markets.•Spells with firms' first exported products are particularly resilient.•Findings are consistent with new exporters learning as they export.