Search Frictions in International Goods Markets

Abstract This paper studies how frictions in the acquisition of new customers distort allocation activities across heterogeneous producers. We add bilateral search a Ricardian model trade and use French firm-to-firm data to estimate faced by exporters foreign markets. Estimated coefficients display strong degree heterogeneity countries products that correlates with various proxies for information frictions. Markets high estimated are shown less dispersion sales between high- low-productivity firms, consequence distortive impact A counterfactual reduction level significantly improves efficiency selection process pushing least productive out market while increasing export at top productivity distribution.