In our previous post we happily announced that the paper of Márta Bisztray, Miklós Koren and Ádám Szeidl was published in the Journal of International Economics. This also grabbed the attention of Voxeu, who then published a blogpost about the paper. The post, following the original article, titled ‘Do friends follow each other?’, describes how connections between firms enhance wider import activity and how these results can guide import-encouraging policies (such as the WTO’s goals). From the post, readers can find out that there is a siginificant effect of neighbors’ previous trade experience on a firm’s trade decisions. So if more companies operate in the same building and one of them is importing from a country the other will be more likely to import from the same country as well. The same is true if a manager with import experience moves from one firm to another. The effect is stronger for productive firms and for firms with many experienced neighbors. This shows the advantages of firm clusters. 

The publication can be found here and the blog post here.