Market Size, Competition, and the Product Mix of Exporters

Thierry Mayer, Marc Melitz and Gianmarco Ottaviano

Chapter 5 in Firms and Workers in a Globalized World:Larger Markets, Tougher Competition, 2021, pp 109-150 from World Scientific Publishing Co. Pte. Ltd.

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 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.

Keywords: Allocative Efficiency; Immigration; Inequality; Innovation; International Competition; International Trade; Macroeconomic Effects of Globalization; New Economic Geography; New Trade Theory; Offshoring; Regional Decline; Regional Growth; Territories; Waves of Globalization; Winners and Losers from Globalization; Borders; Creative Destruction; Cultural Diversity; Economic Geography; Economic Growth; Firm Heterogeneity; Firms and Workers; Globalization (search for similar items in EconPapers)
JEL-codes: F02 F6 F61 F62 (search for similar items in EconPapers)
Date: 2021
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Related works:
Journal Article: Market Size, Competition, and the Product Mix of Exporters (2014)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2014)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2014)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2014)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2012)
Working Paper: Market size, competition, and the product mix of exporters (2012)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2011)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2011)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2011)
Working Paper: Market size, competition, and the product mix of exporters (2011)
Working Paper: Market size, competition, and the product mix of exporters (2011)
Working Paper: Market Size, Competition, and the Product Mix of Exporters (2011)
Working Paper: Market size, competition and the product mix of exporters (2010)
Working Paper: Market Size, Competition, and the Product Mix of Exporters
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