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

Author

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  • 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.

Suggested Citation

  • Julien MARTIN & Florian MAYNERIS, 2013. "High-End Variety Exporters Defying Distance: Micro Facts and Macroeconomic Implications," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2013027
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    References listed on IDEAS

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    Cited by:

    1. Matthieu Crozet & Julian Hinz, 2016. "Collateral Damage: The impact of the Russia sanctions on sanctioning countries’ exports," Working Papers 2016-16, CEPII research center.
    2. Lionel Fontagné & Sophie Hatte, 2013. "European High-End Products in International Competition," PSE - G-MOND WORKING PAPERS hal-00959394, HAL.
    3. Lisandra Flach & Florian Unger, 2016. "Quality and Gravity in International Trade," CESifo Working Paper Series 6080, CESifo Group Munich.
    4. Anna Ray & Antoine Vatan, 2013. "Demand for Luxury Goods in a World of Income Disparities," PSE - G-MOND WORKING PAPERS hal-00959398, HAL.
    5. Anna Ray & Antoine Vatan, 2013. "Demand for Luxury Goods in a World of Income Disparities," Working Papers hal-00959398, HAL.
    6. Flora Bellone & Patrick Musso & Lionel Nesta & Frederic Warzynski, 2016. "International trade and firm-level markups when location and quality matter," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 67-91.
    7. Lionel Fontagné & Sophie Hatte, 2013. "European High-End Products in International Competition," Working Papers hal-00959394, HAL.
    8. Stefaan Decramer & Catherine Fuss & Jozef Konings, 2016. "How Do Exporters React to Changes in Cost Competitiveness?," The World Economy, Wiley Blackwell, vol. 39(10), pages 1558-1583, October.
    9. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.
    10. repec:hal:cesptp:hal-00959394 is not listed on IDEAS
    11. repec:hal:cesptp:hal-00959398 is not listed on IDEAS
    12. Ciani, Andrea & Bartoli, Francesca, 2015. "Export quality upgrading under credit constraints," DICE Discussion Papers 191, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    13. Lionel Fontagné & Sophie Hatte, 2014. "European High-End Varieties in International Competition," Working Papers 2014-27, CEPII research center.
    14. Crozet, Matthieu & Hinz, Julian, 2016. "Friendly fire - the trade impact of the Russia sanctions and counter-sanctions," Kiel Working Papers 2059, Kiel Institute for the World Economy (IfW).
    15. Ciani, Andrea, 2017. "Income inequality and the quality of imports," DICE Discussion Papers 245, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    16. Lionel Fontagné & Sophie Hatte, 2016. "European High-End Varieties in International Competition," Working Papers hal-01299820, HAL.

    More about this item

    Keywords

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

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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