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Market size, competition, and the product mix of exporters

Mayer, Thierry, 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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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
Library of Congress subject classification: H Social Sciences > HF Commerce
Journal of Economic Literature Classification System: F - International Economics > F0 - General
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 1146
Funders: Economic and Social Research Council
Date Deposited: 13 Nov 2013 10:36
URL: http://eprints.lse.ac.uk/54286/

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