Two worlds apart? Export demand shocks and domestic sales

This paper, using a rich dataset on Turkish firms for the 2005–2014 period, analyzes the relationship between firm-product sales in different markets to identify the channels that link exports and domestic sales. First, I use an instrumental variables strategy and establish that an exogenous 10% rise in exports increases a firm’s domestic sales by 2.6% on average. Second, I do an analogous exercise at the firm-product level, and find...