Assortative Matching of Exporters and Importers

Author Name SUGITA Yoichi (Hitotsubashi University) / TESHIMA Kensuke (Instituto Tecnológico Autónomo de México) / Enrique SEIRA (Instituto Tecnológico Autónomo de México)
Creation Date/NO. March 2017 17-E-016
Research Project Analyses of Trade Costs
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We develop a novel approach to detect Beckerian positive assortative matching (PAM) of exporters and importers by capability. Conventional approaches examining firm characteristics across matches in cross-sectional data suffer from an endogeneity problem when firm characteristics reflect unobserved partner characteristics. Instead, using the entry of new exporters induced by trade liberalization as an exogenous shock to the capability rank of incumbent exporters, we investigate resulting re-matching patterns among incumbent exporters and importers. Examining Mexico-U.S. textile/apparel trade that experienced a surge in Chinese exporters after the Multi-Fibre Arrangement's end, we provide the first evidence for Beckerian PAM in exporter-importer relationships.