Why do similar firms export differently?

Vincent Boitier

Research in Economics, 2022, vol. 76, issue 4, 373-385

Abstract: Eaton et al. (2011) underline that firms with similar production costs, entry costs and demand export to different countries. In this theoretical article, I provide a rationale for this feature of the data. I demonstrate that similar firms exporting differently can be explained by a baseline trade-off between attractiveness and competition that is present in any model with monopolistic competition. I then show that this trade-off also generates valuable theoretical features including distance-related mark-ups, third country effect and equivalence with random utility models.

Keywords: Firms’ location; Attractiveness; Competition; Dispersion in strategies; Potential function (search for similar items in EconPapers)
JEL-codes: C72 F10 R10 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:76:y:2022:i:4:p:373-385

DOI: 10.1016/j.rie.2022.09.002

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