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Local Product Space and Firm Level Churning in Exported Products

Cilem Hazir, Flora Bellone () and Cyrielle Gaglio ()

No 2017-02, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis

Abstract: This paper explores the determinants of changes in the range of exports at the firm level with a particular interest in the role played by the locality via product relatedness. To this aim, we introduce a multi-regional setting to the theoretical framework proposed by Bernard et al. (2010), which explains multiple product firms and product switching. We test the propositions of the extended framework using French micro-data that covers information on mono-regional firms operating primarily in manufacturing industry over the period 2002-2007. Our main finding is that the local product space matters in the decisions firms make. Specifically, firms tend to modify their mix of exported products such that their production and export capabilities get more aligned with capabilities that lie beneath core capabilities of the region. Our results also suggest that once firms alter their range of exports, among all new products they start exporting, they enjoy greater export revenues in those that are more related to the core capabilities of the locality.

Keywords: Local Product Space; Product Relatedness; Firm Export Churning; France (search for similar items in EconPapers)
JEL-codes: L25 F14 C49 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2017-01
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http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2017-02.pdf First version, 2017 (application/pdf)

Related works:
Working Paper: Local Product Space and Firm Level Churning in Exported Products (2017)
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