Abstract
This paper uses transaction-level data from Thailand to study concentration, specialization, and fragility of export activities. The paper shows that although exports have been an integral part of the development strategy of the country for several decades, direct engagement in international trade through exports is a rare activity. Export firms are different from their non-export counterparts. Export activities are also extremely concentrated. There is a great deal of churning in Thai exports and exporting relationships are highly fragile. The findings highlight some cautions from a micro perspective about an export-oriented development strategy, particularly regarding concentration and vulnerability.
Highlights
International trade is an important activity of an economy and is inseparable from economic development
Are exporting activities concentrated among few exporters or do they involve the majority of firms in the economy? Second, are exporters specialized or diversified across products and markets? Third, how fragile are exporting activities, i.e., how likely will those entering international markets survive over time? Analyzing granular international trade data from Thailand, one of the most open emerging economies in the world, this paper shows that Thai exports are extremely concentrated among a few large exporters, that there is limited diversification across destinations and products, and that exporting activities are highly fragile
We present the distribution of hybrid and downstream production-chain exporters (DPE) exporters along combined extensive and intensive margins as we did for overall exporters
Summary
International trade is an important activity of an economy and is inseparable from economic development. Analyzing granular international trade data from Thailand, one of the most open emerging economies in the world, this paper shows that Thai exports are extremely concentrated among a few large exporters, that there is limited diversification across destinations and products, and that exporting activities are highly fragile These findings raise cautions for economies currently pursuing or aspiring to adopt a development strategy focusing on exports. High concentration in exports implies that idiosyncratic shocks specific to particular traders, markets, or products can generate large repercussions on aggregate trade value This implication raises a concern on the vulnerability of an export-dependent economy from a micro perspective, in addition to the traditional macro external-dependency argument. This classification yields 4,769 export products and 5,011 import products in 2015, both representing only modest growth over the sample
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