Does a crisis increase the number of regular exporters?

ABSTRACT

The severe reduction in domestic demand between 2008 and 2013 in Spain led many firms to start exporting. We explore whether the increase in the new crisis-induced exporters led to a larger number of regular exporters once domestic demand returned to pre-crisis levels. Using an instrumental variable approach, we find that a 10% increase in new exporters led to a 9% increase in the number of new regular exporters. Since the economic crisis was not anticipated in Spain, our results establish a causal link between a fall in domestic demand and the emergence of new regular exporters.

KEYWORDS:

• Capacity constraints
• new exporters
• regular exporters
• Spain
• crisis

JEL CLASSIFICATION:

• F10
• F14

Acknowledgments

We thank the Department of Customs and Excise of the Spanish Tax Agency (AEAT) for providing Customs data. We gratefully acknowledge financial support from the Spanish Ministry of Economy and Competitiveness (MINECO ECO2016-79650-P and ECO2015-68057-R, co-financed with FEDER) and the Basque Government Department of Education, Language policy and Culture (IT885-16).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Domestic demand is calculated at 2010 constant prices by using data from the Spanish Statistics Institute. Data on Spanish exporters come from the Customs and Excise Department of the Spanish Tax Agency.

² Almunia et al. (2018), using firm-level data, provide econometric evidence on the positive relation between the drop in domestic demand and the higher probability of becoming an exporter in Spain.

³ Journal of Debates of the Spanish Congress 12th of July 2007 and 10 January 2018.

⁴ We cannot use a NACE 4-digit industry fixed effect since it would become a perfect predictor.

Additional information

Funding

This work was supported by the Ministerio de Economía y Competitividad [ECO2015-68057-R,ECO2016-79650-P];Eusko Jaurlaritza. Departamento de Educación, Política Lingüística y Cultura [IT885-16].