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

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Author Info

  • Julien MARTIN

    ()
    (Department of Economics, Universite du Québec a Montreal)

  • Florian MAYNERIS

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches économiques et sociales (IRES) and Center for Operations Research and Econometrics (CORE))

Abstract

We develop a new methodology to identify high-end variety exporters in French firm-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 diversification of their aggregate exports. These facts are explained by a lower sensitivity to distance of 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 different sensitivity to gravity variables, the within-product specialization of a country in the production of high-end varieties is likely to affect its export growth and volatility. We show that a higher sensitivity to per capita income tends to increase the volatility of high-end variety exports. However, a lower sensitivity to distance reduces volatility through a greater geographic diversification. Furthermore, we point out that a lower sensitivity to distance allows high-end varieties to benefit more from growth in more distant markets.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2013027.

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Length: 38
Date of creation: 31 Oct 2013
Date of revision:
Handle: RePEc:ctl:louvir:2013027

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Keywords: Gravity; Distance; Firm-level data; Growth; Volatility;

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References

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  1. Martin, Julien & Méjean, Isabelle, 2011. "Low-Wage Countries' Competition, Reallocation Across Firms and the Quality Content of Exports," CEPR Discussion Papers 8231, C.E.P.R. Discussion Papers.
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  18. Julien Martin, 2010. "Markups, Quality and Transport Costs," Working Papers 2010-17, Centre de Recherche en Economie et Statistique.
  19. Peter K. Schott, 2004. "Across-product Versus Within-product Specialization in International Trade," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 646-677, May.
  20. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2008. "Specialization across varieties and North-South competition," Economic Policy, CEPR & CES & MSH, vol. 23, pages 51-91, 01.
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  22. Antoine Berthou & Charlotte Emlinger, 2010. "Crises and the Collapse of World Trade: the Shift to Lower Quality," Working Papers 2010-07, CEPII research center.
  23. Julia Cagé & Dorothée Rouzet, 2014. "Improving "National Brands": Reputation for Quality and Export Promotion Strategies," PSE Working Papers halshs-00797006, HAL.
  24. Antoine Gervais, 2013. "Product Quality and Firm Heterogeneity in International Trade," Working Papers 13-08, Center for Economic Studies, U.S. Census Bureau.
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Citations

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Cited by:
  1. Anna Ray & Antoine Vatan, 2013. "Demand for Luxury Goods in a World of Income Disparities," PSE - G-MOND WORKING PAPERS hal-00959398, HAL.
  2. repec:hal:cesptp:hal-00959394 is not listed on IDEAS
  3. repec:hal:cesptp:hal-00959398 is not listed on IDEAS
  4. Lionel Fontagné & Sophie Hatte, 2013. "European High-End Products in International Competition," PSE - G-MOND WORKING PAPERS hal-00959394, HAL.

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