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The Extensive Margin of Exporting Products: A Firm-level Analysis

Costas Arkolakis () and Marc-Andreas Muendler ()

No 16641, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use a panel of Brazilian exporters, their products, and destination markets to document a set of regularities for multi-product exporters: (i) few top-selling products account for the bulk of a firm's exports in a market, (ii) the distribution of exporter scope (the number of products per firm in a market) is similar across markets, and (iii) within each market, exporter scope is positively associated with average sales per product. Our data also show that firms systematically export their highest-sales products across multiple destinations. To account for these regularities, we develop a model of firm-product heterogeneity with entry costs that depend on exporter scope. Estimating this model for the within-firm sales distribution we identify the nature and components of product entry costs. We find that firms face a strong decline in product sales with scope but also that market-specific entry costs drop fast. Counterfactual experiments with globally falling entry costs indicate that a large share of the simulated increase in trade is attributable to declines in the firm's entry cost for the first product.

JEL-codes: F12 F14 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-int
Date: 2010-12
Note: ITI
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Working Paper: The Extensive Margin of Exporting Products: A Firm-level Analysis (2016) Downloads
Working Paper: The Extensive Margin of Exporting Products: A Firm-level Analysis (2010) Downloads
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