Exporters During the Trade Collapse: The (Surprising) Resiliency of the Small Exporter

Abstract

How did small exporters fare relative to large exporters during the 2008-09 crisis? Examining the performance of Mexican exporters reveals that crisis did not make smaller exporters more likely to exit, grow less, or expand their product line less. Workhorse models of trade, in response to an aggregate demand or credit shock, would predict the opposite. The same models, however, are consistent with the data before and after the crisis: within industry, (i) firm exit rate is decreasing in size; (ii) conditional on survival, export growth is largely decreasing in size, (iii) net product addition is increasing in size.