Demand Uncertainty : Exporting Delays and Exporting Failures

  title={Demand Uncertainty : Exporting Delays and Exporting Failures},
  author={Daniel X. Nguyen},
This paper presents a model of trade that explains why …rms wait to export and why many exporters fail. Firms face uncertain demands that are only realized after the …rm enters the destination. The model retools the timing of uncertainty resolution found in productivity heterogeneity models. This retooling addresses several shortcomings. First, the imperfect correlation of demands reconciles the sales variation observed in and across destinations. Second, since demands for the …rm’s output are… CONTINUE READING
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