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Firms and economic performance: A view from trade

Alessandra Bonfiglioli (), Rosario Crinò and Gino Gancia ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We use transaction-level US import data to compare Örms from virtually all countries in the world competing in a single destination market. Guided by a simple theoretical framework, we decompose countriesí market shares into the contribution of the number of Örm-products, their average attributes (quality and e¢ ciency) and heterogeneity around the mean. To further explore the role of exceptional Örms, we also develop a novel decomposition that separates the contribution of heterogeneity from that of granularity. Our results show that the number of Örmproducts explains half of the variation in sales, while the remaining part is equally accounted for by average attributes and their dispersion. Quality is the main driver of Örm heterogeneity. While individual Örms matter, we Önd that heterogeneity is more important than granularity for explaining sales. We then study how the distribution of Örm-level characteristics varies across countries, and we explore some of its determinants. Countries with a larger market size tend to be characterized by a more dispersed distribution of Örmsísales, especially due to heterogeneity in quality. These countries also tend to be more likely to host superstar Örms, although this is not the only source of higher heterogeneity.

Keywords: US Imports; Firm Heterogeneity; International Trade; Prices; Quality; Variety; Granularity. (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eff and nep-int
Date: 2018-03, Revised 2018-11
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Working Paper: Firms and Economic Performance: A view from Trade (2018) Downloads
Working Paper: Firms and Economic Performance: A View from Trade (2018) Downloads
Working Paper: Firms and Economic Performance: A View from Trade (2018) Downloads
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