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Fixed export costs and multi-product firms

  • Roger Smeets

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  • Harold Creusen

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    This paper has two aims. First, we uncover some salient components of fixed export costs, which play a crucial role in recent heterogeneous firms models of international trade. Second, we investigate whether the importance of these fixed export costs varies with the size of a firm’s export product portfolio. We find that a destination country’s institutional quality, such as the quality of regulation or the extent of corruption, form important impediments to a firm’s export decision, lowering the export probability to up to 10%-points. Moreover, relative to single-product firms, multi-product firms experience additional export probability decreases of around 2%-points.

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    File URL: http://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-188-fixed-exports-costs-and-multi-product-firms.pdf
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    Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 188.

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    Date of creation: Aug 2011
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    Handle: RePEc:cpb:discus:188
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