NBER

David Lopez-Rodriguez

Structural Analysis Division
DG Economics and Statistics
Bank of Spain
Calle Alcala 48, 28014 Madrid

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Banco de Espana

NBER Working Papers and Publications

December 2018Venting Out: Exports During a Domestic Slump
with Miguel Almunia, Pol Antràs, Eduardo Morales: w25372
We exploit plausibly exogenous geographical variation in the reduction in domestic demand caused by the Great Recession in Spain to document the existence of a robust, within-firm negative causal relationship between demand-driven changes in domestic sales and export flows. Spanish manufacturing firms whose domestic sales were reduced by more during the crisis observed a larger increase in their export flows, even after controlling for firms’ supply determinants (such as labor costs). This negative relationship between demand-driven changes in domestic sales and changes in export flows illustrates the capacity of export markets to counteract the negative impact of local demand shocks. We rationalize our findings through a standard heterogeneous-firm model of exporting expanded to allow for...

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