Being at the core: firm product specialisation

Filippo Bontadini, Mercedes Campi and Marco Due\~nas
Authors registered in the RePEc Author Service: Marco Dueñas

Papers from arXiv.org

Abstract: We propose a novel measure to investigate firms' product specialisation: product coreness, that captures the centrality of exported products within the firm's export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, the composition of firms' export baskets changes relatively little from one year to the other, and products far from the firm's core competencies, with low coreness, are more likely to be dropped. Second, higher coreness is associated with larger export flows at the firm level. Third, such firm-level patterns also have implications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level, which holds across all levels of product complexity. Therefore, the paper shows that how closely a product fits within a firm's capabilities is important for economic performance at both the firm and country level. We explore these issues within an econometric framework, finding robust evidence both across our three countries and for each country separately.

Date: 2023-02, Revised 2023-03
New Economics Papers: this item is included in nep-bec and nep-tid
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http://arxiv.org/pdf/2302.02767 Latest version (application/pdf)

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Working Paper: Being at the Core: Firm product Specialisation (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2302.02767

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