The Great Recession and a Missing Generation of Exporters

We study the impact of foreign market entry and exit by firms on the trajectory of U.S. exports during and after the Great Recession. Using confidential micro-data from the U.S. Census Bureau, we find that incumbent exporters were primarily responsible for the changes in aggregate foreign sales during these years. While there was a substantial decline in the number of firms that sold abroad in the midst of the crisis, new exporters during the recovery compensated for this by having larger foreign sales. Thus, while changes in foreign market participation drove substantial shifts in the variety of U.S. goods that were exported, overall they were less important for the trajectory of total foreign sales over time. Keywords Great recession * Business cycles * Exports * Entry * Exit * Firm dynamics JEL Classification F10 * F40 * E32 * E44 * J2
1 Introduction The sharp decline in aggregate international trade during the Great Recession has garnered significant attention. As shown by Levchenko et al. (2010), the collapse was unprecedented in its [...]