Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144510
Authors: 
Breemersch, Koen
Year of Publication: 
2016
Series/Report no.: 
Working Paper Research 298
Abstract: 
This paper studies the effects of competition in a destination market on the product sales distribution of Belgian multi-product firms using the framework of Mayer et al. (2014). We show that in high competition markets multi-product firms export relatively more of their core products thus skewing the sales distribution towards the best-performing varieties of the firm. A calibrated fit indicates that the general productivity effects that are associated with this skewness reaction are potentially large as firms adjust their production process to accommodate the increased demand for its core products. The skewness effect of high competition markets is only observed for products that the firm eventually drops, underlining the importance of the product extensive margin adjustment. The effect is not limited to manufacturing firms, but also extends to intermediaries in trade and is shown to depend on the type of good that is exported.
Subjects: 
international trade
multi-product firms
competition
product mix
JEL: 
D21
F14
F41
L11
Document Type: 
Working Paper

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