Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205598
Authors: 
Adalet, Muge
Year of Publication: 
2009
Series/Report no.: 
New Zealand Treasury Working Paper No. 09/01
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
Using a unique dataset that covers all exporting firms in New Zealand from 1996 to 2007, this paper analyses the patterns of their product mix, how it changes over time and how this relates to firm characteristics. We suggest that looking at the relative importance of added and dropped products is as important as firm entry/exit in reallocation of resources. We find that in the cross section, multi-product firms are more productive than single product ones. Changes to product mix by New Zealand exporters occur frequently, suggesting that New Zealand exporters are dynamic and there is "creative destruction" at the product level. It is also shown that dropping products is more likely to happen than adding products, suggesting the difficulty of entering new markets and products. We also show that products with a smaller share of total exports and products that have been exported for a short period of time are more likely to be dropped by a firm. The results make a good case for product-firm characteristics being an important part of export decisions and suggest that more work should be done on this link.
Subjects: 
Product churning
product market entry and exit
volatility of earnings
multi product firms
creative destruction
JEL: 
D21
E23
L11
L60
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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