Exporter dynamics and partial-year effects

Abstract

Two identical firms that start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down first year export levels and biases up first year export growth rates. For Peruvian exporters, the partial-year bias is large: first- year export levels are understated by 54 percent and the first year growth rate is overstated by 112 percentage points. Correcting the partial-year effect dramatically reduces first year export growth rates, raises initial export levels and almost doubles the contribution of net firm entry and exit to overall export growth.