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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/46265
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| Title: | | The extensive margin of exporting products: A firm-level analysis  |
| Authors: | | Arkolakis, Costas Muendler, Marc-Andreas |
| Issue Date: | | 2010 |
| Series/Report no.: | | CESifo working paper: Trade Policy 3309 |
| Abstract: | | We use a panel of Brazilian exporters, their products, and destination markets to document a set of regularities for multi-product exporters: (i) few top-selling products account for the bulk of a firm's exports in a market, (ii) the distribution of exporter scope (the number of products per firm in a market) is similar across markets, and (iii) within each market, exporter scope is positively associated with average sales per product. Our data also show that firms systematically export their highest-sales products across multiple destinations. To account for these regularities, we develop a model of firm-product heterogeneity with entry costs that depend on exporter scope. Estimating this model for the within-firm sales distribution we identify the nature and components of product entry costs. We find that firms face a strong decline in product sales with scope but also that market-specific entry costs drop fast. Counterfactual experiments with globally falling entry costs indicate that a large share of the simulated increase in trade is attributable to declines in the firm's entry cost for the first product. |
| Subjects: | | international trade heterogeneous firms multi-product firms firm and product panel data Brazil |
| JEL: | | F12 L11 F14 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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