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Coping with the crisis and export diversification
Author(s) -
Abreha Kaleb Girma,
Smeets Valérie,
Warzynski Frédéric
Publication year - 2020
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12937
Subject(s) - diversification (marketing strategy) , destinations , global recession , economics , recession , china , portfolio , international economics , export performance , international trade , coping (psychology) , business , tourism , macroeconomics , financial economics , psychology , psychiatry , political science , law , marketing
Abstract Using a highly disaggregated firm–product–destination level data from Denmark, we analyse how Danish exporters responded to the global recession in 2008–09 and the recovery that followed. We show that firms reacted mainly by adjusting their scale of export shipments and by extending their export portfolio outside of their core products and markets. More importantly, we also find that export diversification into fast‐growing economies like China was associated with better export growth performance. Hence, trade reorientation beyond traditional market destinations accelerated export growth and as such constitutes an important mechanism for understanding the various determinants of firm heterogeneity.