Search Frictions in International Goods Markets

Clémence Lenoir (1) , Julien Martin (2) , Isabelle Mejean (3)

1 Direction Générale du Trésor
2 UQAM - Université du Québec à Montréal = University of Québec in Montréal
3 ECON - Département d'économie (Sciences Po)

This paper studies how frictions in the acquisition of new customers distort the allocation of activities across heterogeneous producers. We add bilateral search frictions in a Ricardian model of trade and use French firm-to-firm trade data to estimate search frictions faced by French exporters in foreign markets. Estimated coefficients display a strong degree of heterogeneity across countries and products that correlates with various proxies for information frictions. Markets with high estimated frictions are shown to display less dispersion in sales between high- and low-productivity firms, a consequence of the distortive impact of frictions. A counterfactual reduction in the level of search frictions significantly improves the efficiency of the selection process by pushing the least productive exporters out of the market while increasing export sales at the top of the productivity distribution.

Mots clés: Firm-to-firm trade; Search frictions; Ricardian trade model; Structural estimation

Domaines: Economies et finances

Clémence Lenoir, Julien Martin, Isabelle Mejean. Search Frictions in International Goods Markets. Journal of the European Economic Association, In press, ⟨10.1093/jeea/jvac044⟩. ⟨hal-03880110⟩