Market Size, Competition, and the Product Mix of Exporters

Thierry Mayer, Marc Melitz and Gianmarco Ottaviano

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: 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.

Keywords: trading partners; multi product firms; trade models (search for similar items in EconPapers)
JEL-codes: F0 (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-bec, nep-com and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1146

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