High-End Variety Exporters Defying Distance: Micro Facts and Macroeconomic Implications

Julien Martin and Florian Mayneris

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Abstract: We develop a new methodology to identify high-end variety exporters in French fi rm level data. We show that they do not export to many more countries, but they export to more distant ones. This comes with a greater geographic diversi cation of their aggregate exports. In contrast to low-end export(er)s, we find that distance has almost no eff ect on high-end variety export(er)s. We also show that high-end export(er)s are more sensitive to the average income of the destination country. Because of this di erent sensitivity to gravity variables at the micro-level, specializing in the production of high-end varieties has two macroeconomic implications for countries. First, the sources of a country's aggregate exports volatility are modi ed. The higher sensitivity to per capita income increases the sensitivity of high-end variety exports to destination-speci c demand shocks, and thus their volatility on a given market. However, their lower sensitivity to distance allows for a greater geographic diversi cation of their exports, which in turn reduces aggregate volatility through a portfolio e ect. Second, the lower sensitivity to distance allows highend varieties to bene t more from demand growth, especially when it arises in distant markets.

Keywords: Vertical di erentiation; Gravity; Distance; Volatility (search for similar items in EconPapers)
Date: 2013-10
Note: View the original document on HAL open archive server: https://hal-pse.archives-ouvertes.fr/hal-00959404
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Working Paper: High-end variety exporters defying distance: micro facts and macroeconomic implications (2013)
Working Paper: High-End Variety Exporters Defying Distance: Micro Facts and Macroeconomic Implications (2013)
Working Paper: High-End Variety Exporters Defying Distance: Micro Facts and Macroeconomic Implications (2013)
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