DP11687 The Origin and Dynamics of Export Superstars

Author(s): Caroline Freund, Denisse Pierola
Publication Date: December 2016
Keyword(s): comparative advantage, export growth, firm size distribution, power law
JEL(s): D22, F14, L11, L25
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11687

This paper uses firm-level data on manufacturing trade from 40 developing countries to explore how the five largest exporters in a country contribute to export growth and diversification. The origins of these firms are also studied. The data show that the top five exporters account for on average one third of exports, over half of export growth, and almost all of export diversification over a five-year period. Controlling for country and industry-fixed effects, the share of exports in the top five firms increases significantly as exports grow. Most top five exporters were already large five years ago or are new firms; it is extremely rare for these export super- stars to emerge from the bottom half of the firm-size distribution. They are producers, not traders, and are primarily foreign owned.