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The Extensive Margin of Exporting Products: A Firm-level Analysis

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Abstract

We examine multi-product exporters and use firm-product-destination data to quantify export entry barriers. Our general-equilibrium model of multi-product firms generalizes earlier models. To match main facts about multi-product exporters, we estimate our model with rich demand and access cost shocks for Brazilian firms. The estimates document that additional products farther from a firm�s core competency incur higher unit costs, but face lower market access costs. We find that these market access costs differ across destinations and evaluate a scenario that standardizes market access between countries. The resulting welfare gains are similar to eliminating all current tariffs.

Suggested Citation

  • Costas Arkolakis & Sharat Ganapati & Marc-Andreas Muendler, 2016. "The Extensive Margin of Exporting Products: A Firm-level Analysis," Cowles Foundation Discussion Papers 2028, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:2028
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    More about this item

    Keywords

    International trade; Heterogeneous firms; Multi-product firms; Firm and product panel data; Brazil;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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