Report
How Exporters Grow
Haller, Stephanie; Fitzgerald, Doireann; Yedid-Levi, Yaniv (2016-01-21)
We show that after firms enter new export markets, there are striking dynamics of quantities, but no dynamics of prices, controlling for both costs and selection. This points to an important role for demand in the growth of successful exporters, and to a nonprice mechanism through which quantity demanded grows. A model where firms engage in costly investment in customer base through marketing and advertising, and learn about their idiosyncratic demand, can qualitatively match these facts, along with a declining exit hazard. We structurally estimate the model and find that costs of adjusting ...
Staff Report , Paper 524

Briefing
How Well Do Firms Retain Customers After Price Increases?
Gholami, Samira; Trachter, Nicholas (2023-05)
Economists at the Federal Reserve Bank of Richmond and the Einaudi Institute for Economics and Finance developed a model that studies the optimal price setting of a firm. Using microdata from the U.S. retail industry, we document that customer turnover responds to price changes. Therefore, to keep customers, firms do not completely pass productivity shocks through to their prices. The price pass-through is heterogeneous across firms, with the most productive firms passing through more.
Richmond Fed Economic Brief , Volume 23 , Issue 16

Report
Appendix for How Exporters Grow
Yedid-Levi, Yaniv; Fitzgerald, Doireann; Haller, Stephanie (2017-01-24)
No abstract
Staff Report , Paper 539