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The Extensive Margin of Exporting Products: A Firm-level Analysis
Costas Arkolakis, Marc-Andreas Muendler
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Current draft: Aug 3, 2011 First draft: Nov 13, 2007 |
University of California, San Diego
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abstract
We use a panel of Brazilian exporters, their products, and destination markets to document a set of regularities for multi-product exporters. Our data reveal that multi-product firms systematically export their top products across multiple destinations but their lowest-selling products ship in smaller amounts than the lowest-selling products of small exporters. To account for these regularities, we develop a model of firm-product heterogeneity with local entry costs that depend on exporter scope (the number of a firm's products in a market). Estimating this model for the within-firm sales distribution 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.
keywords: International trade; heterogeneous firms; multi-product firms; firm and product panel data; Brazil
jel: F12, L11, F14
background
- companion paper (continuous product space with generalizations)
[pdf 194k]
- nber working paper [16641] version
- supporting files
- online data appendix (additional tables and graphs)
[pdf 5.8M]
- online technical appendix (nested demand system with different elasticities)
[pdf 121k]
- replication code
- estimation in stata 9.2
[zip 303k] (8/3/2011)
code is documented in, and directly executable through, master program %OrderOfPrograms.do
- predictions in matlab 5
[m 9k] (previous version 11/30/2010)
- simulations in matlab 5 (including global trade data in 2000)
[zip 15k] (previous version 11/30/2010)
- converter sitc2isic [csv 13k] [stata9 51k]
converter documentation [pdf 118k]
- data sources
- exporter and product data SECEX (description by OECD)
- formal employment and firm census RAIS (in portuguese)
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