Trade effects of a negative export shock on direct exporters and wholesalers

Abstract

Purpose

This paper aims to investigate the effects of a multifaceted negative Russian export shock of 2014 on the exports Estonian firms that exported non-embargoed goods to Russia.

Design/methodology/approach

The dataset covers all the Estonian exporters that exported non-embargoed goods to Russia in 2013 and the empirical analysis uses a difference-in-difference method in combination with the coarsened exact matching method to account for heterogeneities between the treatment and control groups.

Findings

The empirical findings show that wholesalers affected were generally able to show better export performance after the negative shock than direct exporters were. The trade performance after the shock was lower for both wholesalers and direct exporters that had lower initial productivity levels.

Originality/value

As a novelty, this study simultaneously addresses several firm heterogeneities to illustrate how the trade effects of a negative export shock differ between firms with different key characteristics, including between wholesalers and direct exporters.

Citation

Juust, M. (2023), "Trade effects of a negative export shock on direct exporters and wholesalers", Journal of Economic Studies, Vol. 50 No. 5, pp. 967-986. https://doi.org/10.1108/JES-01-2022-0056