Market Size, Competition, and the Product Mix of Exporters
Ottaviano, Gianmarco I. P.
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CitationMayer, Thierry, Marc J. Melitz, and Gianmarco I. P. Ottaviano. 2014. “ Market Size, Competition, and the Product Mix of Exporters.” American Economic Review 104 (2) (February): 495–536.
AbstractWe 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:12330897
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