Heterogeneous agrifood firms, agricultural prices and access to foreign markets

Léo Le Mener

No 15-11, Working Papers SMART from INRAE UMR SMART

Abstract: We analyze how a change in agricultural input price impacts the selection process and market shares in foreign markets for firms in the final agrifood good sector. To do so we develop a model with heterogeneous firms and intermediate good where input use is technologically constrained. We show that the effect of input price depends on labor productivity and fixed costs. Moreover, we show that a decrease in input price in all countries can decrease the probability to enter foreign markets, through export or horizontal foreign direct investment (HFDI). Finally, we show that the decrease of the intermediate good price always increases the share of HFDI relative to export, even if it can modify the HFDI-Export trade-off in favor of HFDI or export.

Keywords: Horizontal Foreign Direct Investment; exports; firm heterogeneity; processing sectors; agricultural prices (search for similar items in EconPapers)
JEL-codes: F12 L11 Q18 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015
New Economics Papers: this item is included in nep-agr and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://ageconsearch.umn.edu/bitstream/210101/2/WP15-11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:201511

Access Statistics for this paper

More papers in Working Papers SMART from INRAE UMR SMART Contact information at EDIRC.
Bibliographic data for series maintained by Anne Chauvel ().