IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-01676952.html
   My bibliography  Save this paper

Local Product Space and Firm Level Churning in Exported Products

Author

Listed:
  • Flora Bellone

    () (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)

  • Cilem Selin Hazir

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon)

  • Cyrielle Gaglio

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)

Abstract

This paper explores the determinants of changes in the range of exports at the firm level with a particular interest in the role played by the locality via product relatedness. To this aim, we introduce a multi-regional setting to the theoretical framework proposed by Bernard et al. (2010), which explains multiple product firms and product switching. We test the propositions of the extended framework using French micro-data that covers information on mono-regional firms operating primarily in manufacturing industry over the period 2002-2007. Our main finding is that the local product space matters in the decisions firms make. Specifically, firms tend to modify their mix of exported products such that their production and export capabilities get more aligned with capabilities that lie beneath core capabilities of the region. Our results also suggest that once firms alter their range of exports, among all new products they start exporting, they enjoy greater export revenues in those that are more related to the core capabilities of the locality.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Flora Bellone & Cilem Selin Hazir & Cyrielle Gaglio, 2017. "Local Product Space and Firm Level Churning in Exported Products," Working Papers hal-01676952, HAL.
  • Handle: RePEc:hal:wpaper:hal-01676952
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01676952
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2014. "The micro patterns of export diversification under financial constraints," Industrial and Corporate Change, Oxford University Press, vol. 23(6), pages 1595-1622.
    2. Lauren Larrouy & Guilhem Lecouteux, 2017. "Mindreading and endogenous beliefs in games," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(3), pages 318-343, July.
    3. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Taylor & Francis Journals, vol. 87(3), pages 237-265, July.
    4. Arnelyn Abdon & Jesus Felipe, 2011. "The Product Space: What Does It Say About the Opportunities for Growth and Structural Transformation of Sub-Saharan Africa?," Economics Working Paper Archive wp_670, Levy Economics Institute.
    5. Ron Boschma & Asier Minondo & Mikel Navarro, 2013. "The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness," Economic Geography, Taylor & Francis Journals, vol. 89(1), pages 29-51, January.
    6. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
    7. Hanson, Gordon H. & Lind, Nelson & Muendler, Marc-Andreas, 2015. "The Dynamics of Comparative Advantage," CAGE Online Working Paper Series 252, Competitive Advantage in the Global Economy (CAGE).
    8. Cadot, Olivier & Iacovone, Leonardo & Pierola, Martha Denisse & Rauch, Ferdinand, 2013. "Success and failure of African exporters," Journal of Development Economics, Elsevier, vol. 101(C), pages 284-296.
    9. Frank M.H. Neffke & Martin Henning & Ron Boschma, 2012. "The impact of aging and technological relatedness on agglomeration externalities: a survival analysis," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 485-517, March.
    10. Carsten Eckel & J. Peter Neary, 2010. "Multi-Product Firms and Flexible Manufacturing in the Global Economy," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 188-217.
    11. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
    12. Ron Boschma, 2017. "Relatedness as driver of regional diversification: a research agenda," Regional Studies, Taylor & Francis Journals, vol. 51(3), pages 351-364, March.
    13. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    14. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    15. Sayan Chatterjee & Birger Wernerfelt, 1991. "The link between resources and type of diversification: Theory and evidence," Strategic Management Journal, Wiley Blackwell, vol. 12(1), pages 33-48, January.
    16. Frank Neffke & Matté Hartog & Ron Boschma & Martin Henning, 2018. "Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification," Economic Geography, Taylor & Francis Journals, vol. 94(1), pages 23-48, January.
    17. Koenig, Pamina & Mayneris, Florian & Poncet, Sandra, 2010. "Local export spillovers in France," European Economic Review, Elsevier, vol. 54(4), pages 622-641, May.
    18. Ron Boschma, 2017. "Relatedness as driver behind regional diversification: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 1702, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2017.
    19. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    20. Koenig, Pamina, 2009. "Agglomeration and the export decisions of French firms," Journal of Urban Economics, Elsevier, vol. 66(3), pages 186-195, November.
    21. Sandra Poncet & Felipe Starosta de Waldemar, 2015. "Product Relatedness and Firm Exports in China," World Bank Economic Review, World Bank Group, vol. 29(3), pages 579-605.
    22. Greenaway, David & Kneller, Richard, 2008. "Exporting, productivity and agglomeration," European Economic Review, Elsevier, vol. 52(5), pages 919-939, July.
    23. Usui, Norio & A. Abdon, Arnelyn May, 2010. "Structural Transformation in the Kyrgyz Republic: Engineering Future Paths of Capability Accumulation," ADB Economics Working Paper Series 200, Asian Development Bank.
    24. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    25. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    26. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    27. Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2014. "The micro patterns of export diversification under financial constraints," PSE-Ecole d'économie de Paris (Postprint) hal-01297119, HAL.
    28. Leonardo Iacovone & BeataS. Javorcik, 2010. "Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries," Economic Journal, Royal Economic Society, vol. 120(544), pages 481-499, May.
    29. David J. Teece, 2003. "Towards an Economic Theory of the Multiproduct Firm," World Scientific Book Chapters, in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 15, pages 419-446, World Scientific Publishing Co. Pte. Ltd..
    30. Ron Boschma & Asier Minondo & Mikel Navarro, 2012. "Related variety and regional growth in Spain," Papers in Regional Science, Wiley Blackwell, vol. 91(2), pages 241-256, June.
    31. Lopresti, John, 2016. "Multiproduct firms and product scope adjustment in trade," Journal of International Economics, Elsevier, vol. 100(C), pages 160-173.
    32. Steven Klepper, 2007. "Disagreements, Spinoffs, and the Evolution of Detroit as the Capital of the U.S. Automobile Industry," Management Science, INFORMS, vol. 53(4), pages 616-631, April.
    33. Ricardo Hausmann & César Hidalgo, 2011. "The network structure of economic output," Journal of Economic Growth, Springer, vol. 16(4), pages 309-342, December.
    34. Alessia Lo Turco & Daniela Maggioni, 2016. "On firms’ product space evolution: the role of firm and local product relatedness," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 975-1006.
    35. Pamina Koenig, 2009. "Agglomeration and the Export Decision of French Firms," PSE-Ecole d'économie de Paris (Postprint) halshs-00754328, HAL.
    36. Connie Bayudan-Dacuycuy, 2012. "The Philippine export portfolio in the product space: potentials, possibilities and policy challenges," Economics Bulletin, AccessEcon, vol. 32(1), pages 59-66.
    37. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    38. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    39. Daniel Goya & Andrés Zahler, 2017. "'Distance from the core' and new export survival: Evidence from Chilean exporters," Working Papers 2017-01, Escuela de Negocios y Economía, Pontificia Universidad Católica de Valparaíso.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Flora Bellone & Cilem Selin Hazir & Toshiyuki Matsuura, 2020. "Adjusting to China competition: Evidence from Japanese plant-product-level data," Working Papers hal-03086387, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shengjun Zhu & Canfei He & Qian Luo, 2019. "Good neighbors, bad neighbors: local knowledge spillovers, regional institutions and firm performance in China," Small Business Economics, Springer, vol. 52(3), pages 617-632, March.
    2. Nicola Cortinovis & Jing Xiao & Ron Boschma & Frank G van Oort, 2017. "Quality of government and social capital as drivers of regional diversification in Europe," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1179-1208.
    3. Alessia Lo Turco & Daniela Maggioni, 2016. "On firms’ product space evolution: the role of firm and local product relatedness," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 975-1006.
    4. Francesco Quatraro & Alessandra Scandura, 2020. "Regional patterns of unrelated technological diversification: the role of academic inventors," Carlo Alberto Notebooks 603, Collegio Carlo Alberto.
    5. Ron Boschma, 2015. "Towards an Evolutionary Perspective on Regional Resilience," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 733-751, May.
    6. Alessia Lo Turco & Daniela Maggioni, 2017. "Local Discoveries and Technological Relatedness: the Role of Foreign Firms," Papers in Evolutionary Economic Geography (PEEG) 1710, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2017.
    7. Jian Gao & Bogang Jun & Alex Sandy Pentland & Tao Zhou & Cesar A. Hidalgo, 2017. "Collective Learning in China's Regional Economic Development Formations of Co-Inventors During the Dot-com Bubble in the Research Triangle Region," Papers in Evolutionary Economic Geography (PEEG) 1706, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2017.
    8. Kiss, Károly Miklós & Lengyel, Balázs & Lőrincz, László & Elekes, Zoltán & Csáfordi, Zsolt, 2019. "Az iparágak közti hasonlóság mérésének hálózati módszerei és relevanciájuk a gazdaságfejlesztésben [Network methods for measuring inter-industrial similarity and the relevance of them to economic d," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 22-52.
    9. Evgeniy Kutsenko & Yaroslav Eferin, 2019. "“Whirlpools” and “Safe Harbors” in the Dynamics of Industrial Specialization in Russian Regions," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 13(3), pages 24-40.
    10. Jian Gao & Bogang Jun & Alex Sandy Pentland & Tao Zhou & Cesar A. Hidalgo, 2017. "Collective Learning in China's Regional Economic Development," Papers 1703.01369, arXiv.org.
    11. Jacob Rubæk Holm & Christian Richter Østergaard, 2018. "The high importance of de-industrialization and job polarization for regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1821, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2018.
    12. Marte C.W. Solheim & Ron Boschma & Sverre Herstad, 2018. "Related variety, unrelated variety and the novelty content of firm innovation in urban and non-urban locations," Papers in Evolutionary Economic Geography (PEEG) 1836, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2018.
    13. Kroll Henning & Neuhäusler Peter, 2020. "Recent Trends of Regional Development in China – Technological Portfolios and Economic Growth," Zeitschrift für Wirtschaftsgeographie, De Gruyter, vol. 64(1), pages 14-27, March.
    14. Lars Mewes & Tom Broekel, 2020. "Subsidized to change? The impact of R&D policy on regional technological diversification," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(1), pages 221-252, August.
    15. Ron Boschma, 2017. "Relatedness as driver behind regional diversification: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 1702, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2017.
    16. Niccolò Innocenti & Luciana Lazzeretti, 2018. "Relatedness and growth: The impact of creative industries to the wider economy," Papers in Evolutionary Economic Geography (PEEG) 1819, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2018.
    17. Fernandes, Ana P. & Tang, Heiwai, 2014. "Learning to export from neighbors," Journal of International Economics, Elsevier, vol. 94(1), pages 67-84.
    18. Kolja Hesse & Dirk Fornahl, 2020. "Essential ingredients for radical innovations? The role of (un‐)related variety and external linkages in Germany," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1165-1183, October.
    19. Luciana Lazzeretti & Niccolò Innocenti & Francesco Capone, 2015. "Does Related variety matter for Creative Industries?," Papers in Evolutionary Economic Geography (PEEG) 1510, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2015.
    20. Cyrielle Gaglio, 2015. "Measuring Country Competitiveness: A Survey of Exporting-based Indexes," GREDEG Working Papers 2015-42, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.

    More about this item

    Keywords

    Local Product Space; Product Relatedness; Firm Export Churning; France;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-01676952. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.