Temperatures, Heterogeneous Exporters and Aggregate Trade
Clément Nedoncelle  1@  
1 : inrae economie publique
Université Paris-Saclay, INRAE, AgroParisTech

This paper studies exporting firms' reaction to weather shocks in destination countries, and the role played by trade diversion as a shock-coping strategy.
Using detailed customs data from France, from 1995 to 2009, I show that the geography of exports across markets both at the firm and the aggregate levels are affected by temperature shocks.
At the firm level, temperature shocks have a trade deterring effect, in particular for larger firms. I rationalize this result by trade diversion motives: large firms divert away from countries under heat and reduce their exports to these markets. At the aggregate level, temperature shocks in a destination market generate a change in the set of exporting firms that serve this market, in the favor of smaller firms, while larger firms divert their exports, thus generating an aggregate trade diversion away from destinations under heat.

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