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Market size, competition, and the product mix of exporters

Mayer, Thierry and Melitz, Marc J. and Ottaviano, Gianmarco I. P. (2012) Market size, competition, and the product mix of exporters. CEP discussion papers, 1146. Centre for Economic Performance, London, UK.

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Identification Number: 1146

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.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2012 The Authors
Subjects: H Social Sciences > HF Commerce
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 13 Nov 2013 10:36
Last Modified: 13 Nov 2013 11:27
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/54286

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