Doctoral Programme Quantitative Economics

Tools of the trade: export margins in Norwegian trade data


Recognizing that it is firms, not countries that trade, in recent years a substantial literature has developed using firm data to investigate trade dynamics. This literature has a number of strands, such as various margins of trade, characteristics of exporting firms and choice of invoicing currency. In this paper we show that several of these literature strands can be brought together if the firm perspective is taken more fully into account when defining the trade margins. In particular, the trade margins can be made functions of firm characteristics and invoicing choices. Using detailed transaction level data for the period 2004-2013 we investigate the intensive margin of trade for Norwegian exporters. We offer a detailed decomposition of the intensive margin of trade, and that there are important differences between product types and firms. Knowledge of the importing firm also allows tests of importance of buyer side heterogeneity as a part of the intensive margin.