Changes in U.S. Exporter Participation and Trade Costs

We decompose the change in the U.S. export share of GDP into an intensive and extensive margin. We then use a model of establishment export dynamics to infer the change in marginal and fixed trade costs from 1976 to 2002. We find the fall in tariffs and transport costs account for approximately 80 percent of the increase in U.S. exports over this period. The fixed costs of starting and continuing exporting have fallen considerably less and account for approximately 10 percent the rise in exports. Increases in foreign income account for the remaining growth in U.S. exports.