Multi-Product Exporters and Product Turnover Behaviour of New Zealand Exporters
AbstractUsing a unique dataset that covers all exporting firms in New Zealand from 1996 to 2007, this paper analyses the patterns of their product mix, how it changes over time and how this relates to firm characteristics. We suggest that looking at the relative importance of added and dropped products is as important as firm entry/exit in reallocation of resources. We find that in the cross section, multi-product firms are more productive than single product ones. Changes to product mix by New Zealand exporters occur frequently, suggesting that New Zealand exporters are dynamic and there is “creative destruction” at the product level. It is also shown that dropping products is more likely to happen than adding products, suggesting the difficulty of entering new markets and products. We also show that products with a smaller share of total exports and products that have been exported for a short period of time are more likely to be dropped by a firm. The results make a good case for product-firm characteristics being an important part of export decisions and suggest that more work should be done on this link.
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Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 09/01.
Date of creation: Apr 2009
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Product churning; product market entry and exit; volatility of earnings; multi product firms; creative destruction;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-03 (All new papers)
- NEP-BEC-2009-06-03 (Business Economics)
- NEP-MKT-2009-06-03 (Marketing)
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