Domestic Spillovers and Foreign Networks in Exporting

We explore the effects of Domestic Spillovers (other domestic firms exporting a good to a given country) and Foreign Networks (links to other countries via firm’s trading partners) on the firm’s choice of new export destinations. By matching Colombian exporting and Chilean importing and exporting firms between 2007 and 2016, we show that both effects matter and that they amplify each other. Jointly these effects are more important than geographic proximity measures, import and export growth, and market size combined. Domestic spillovers are relatively more important, especially for identifying the persistent exporters, which export to a new destination for more than a year.