Economics at your fingertips  

Product appeal, differences in tastes, and export performance: Evidence for Danish chocolate and confectionery

Ina C. Jäkel

International Journal of Industrial Organization, 2019, vol. 63, issue C, 417-459

Abstract: This paper studies the relationship between domestic market performance and export performance. We employ data on production and trade in the Danish chocolate and confectionery industry to obtain estimates of domestic ‘product appeal’ (reflecting non-price factors of domestic performance). Domestic product appeal is influenced not only by inherent characteristics of the product, but also by the tastes and preferences of domestic consumers. For many consumer goods, tastes depend on customs, culture etc. A product’s domestic appeal is therefore an imperfect predictor of foreign demand (and hence of export performance), especially in destinations where tastes differ substantially from domestic tastes. We combine estimates of domestic product appeal with information on destination-specific exports and a novel measure of differences in tastes across countries to confirm this hypothesis. Results are consistent across both a Tobit model with destination-specific censoring point and the BLP estimator, which additionally reveals substantial heterogeneity in tastes for product appeal within countries across consumers.

Keywords: Firm heterogeneity; Exports; Demand estimation (search for similar items in EconPapers)
JEL-codes: F12 F14 L15 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-05-11
Handle: RePEc:eee:indorg:v:63:y:2019:i:c:p:417-459