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

  • 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))

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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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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