michiganJosé de Sousa  attended the 23nd Annual Conference on: Empirical Investigations in International Trade, Friday october 14, at University of Michigan. He presented “Export Decision under Risk” (with  Anne-Célia Disdier and Carl Gaigné).
Using firm and industry data, we establish two facts: (i) Uncertainty about demand conditions not only reduces export sales and exporting probabilities but also makes exports less sensitive to trade policy; (ii) the most productive exporters are more affected by higher industry-wide expenditure volatility than the least productive  exporters.   We  rationalize  these  regularities  by  developing  a  new  firmbased trade model wherein managers are risk averse.   Higher volatility induces the reallocation of export shares from the most to the least productive incumbents. Greater skewness of the demand distribution and/or higher trade cost weaken this effect. Our results hold for a large class of consumer utility functions.