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From Macro to Micro: Large Exporters Coping with Common Shocks

Author

Listed:
  • Jean-Charles Bricongne
  • Juan Carluccio
  • Lionel Fontagné
  • Guillaume Gaulier
  • Sebastian Stumpner
Abstract
Since Gabaix (2011), the role of changes in the performance of some very large firms in shaping aggregate outcomes has been intensively studied in the economic literature. Changes in the performance of a few large firms can arise due to idiosyncratic shocks or idiosyncratic reactions to common shocks. This paper provides direct evidence for the second channel using data on the universe of French firm-level exports and imports over 1993-2020. Granularity matters for the micro-dynamics of aggregate French exports over the long run: the granular residual explains 42% of the variance in aggregate export growth during the period. Moreover, it co-moves with the macro shocks: the largest firms do better than average in good times and worse in bad times. Studying firm-level performance during the Great Financial Crisis and the Pandemic reveals that top exporters contributed to the export collapses disproportionably more than their pre-crisis share of exports, even within finely defined markets. We investigate the reasons for such over-reaction of the top exporters using the Pandemic as a natural experiment. We find that a higher elasticity to demand shocks explains the larger reaction of top exporters to the Pandemic, with GVC exposure having weak explanatory power. Our findings have macro implications, as they help understand the macro reaction to foreign shocks, and micro implications, since they can inform micro models of exports.

Suggested Citation

  • Jean-Charles Bricongne & Juan Carluccio & Lionel Fontagné & Guillaume Gaulier & Sebastian Stumpner, 2022. "From Macro to Micro: Large Exporters Coping with Common Shocks," Working papers 881, Banque de France.
    • Handle: RePEc:bfr:banfra:881
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gloria Allione & Claire Giordano, 2023. "Are the Happy Few still happy? Exporter heterogeneity during the COVID-19 pandemic in Italy," Questioni di Economia e Finanza (Occasional Papers) 816, Bank of Italy, Economic Research and International Relations Area.
    2. Matthias Fauth & Benjamin Jung & Wilhelm Kohler, 2023. "German Firms in International Trade: Evidence from Recent Microdata," CESifo Working Paper Series 10523, CESifo.
    3. Lionel Fontagné & Gianluca Santoni, 2022. "Regional Diffusion of Foreign Demand Shocks Through Trade and Ownership Networks," Working Papers 2022-08, CEPII research center.
    4. Léa Crepin & Clément Nedoncelle, 2024. "Foreign demand, soy exports, and deforestation," French Stata Users' Group Meetings 2024 26, Stata Users Group.
    5. Gianmarco Cariola, 2023. "Trade in the time of COVID-19: an empirical analysis based on Italian data," Temi di discussione (Economic working papers) 1427, Bank of Italy, Economic Research and International Relations Area.
    6. de Lucio, Juan & Mínguez, Raúl & Minondo, Asier & Requena, Francisco, 2024. "The negative impact of disintegration on trade: The case of Brexit," European Economic Review, Elsevier, vol. 163(C).
    7. Lalinsky, Tibor & Anyfantaki, Sofia & Benkovskis, Konstantins & Bergeaud, Antonin & Bun, Maurice & Bunel, Simon & Colciago, Andrea & De Mulder, Jan & Lopez, Beatriz Gonzalez & Jarvis, Valerie & Krasno, 2024. "The impact of the COVID-19 pandemic and policy support on productivity," Occasional Paper Series 341, European Central Bank.
    8. Mélina London & Maéva Silvestrini, 2023. "US Monetary Policy Spillovers to Emerging Markets: the Trade Credit Channel," Working papers 915, Banque de France.
    9. Lebastard, Laura & Matani, Marco & Serafini, Roberta, 2023. "GVC exporter performance during the COVID-19 pandemic: the role of supply bottlenecks," Working Paper Series 2766, European Central Bank.

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    More about this item

    Keywords

    Granularity; Exports; COVID crisis;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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