Type
Article
Title
Market Size, Competition, and the Product Mix of Exporters
In
American Economic Review
Author(s)
MAYER Thierry - Département d'économie (Author)
MELITZ Marc J. - Department of Economics (Author)
OTTAVIANO Gianmarco - Università di Bologna (Author)
Editor
US : American Economic Association
Volume
104
Number
2
Pages
495 - 536 p.
ISSN
00028282
Abstract
EN
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 toward 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.

BIBLIOGRAPHIC QUOTE
EXPORT