David A. Wells Professor of Political Economy
"Market Size, Competition, and the Product Mix of Exporters"
Thursday, December 6, 2012
4:00 pm - C103 Hesburgh Center
We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export market induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Theoretically, this within-firm change in product mix driven by the trading environment has important repercussions on firm productivity. A calibrated fit to our theoretical model reveals that these productivity effects are potentially quite large.
CEPII and CEPR
Gianmarco I. P. Ottaviano
London School of Economics
Bocconi University, CEP and CEPR
To view full paper, click here.