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Multi-product exporters, carry-along trade and the margins of trade

  • Andrew B. Bernard


    (Tuck School of Business at Dartmouth

  • Ilke Van Beveren


    (Lessius Department of Business Studies

  • Hylke Vandenbussche


    (Université Catholique de Louvain, IRES
    Université Catholique de Louvain, CORE

New empirical and theoretical work has highlighted the importance of multi-product firms in international tradeflows. We examine multi-product exporters in the small open economy of Belgium, considering their importance and the relationship between the margins of trade and firm productivity, both across firms and within firms over time. In addition, we employ proxies for trade costs to quantify the extensive and intensive margin adjustments of trade. Linking production and export data at the firm-product level, we discover new and, heretofore, unknown facts about multi-product manufacturing exporters. The large majority of Belgian manufacturing firms export products that they do not produce. More than three quarters of the exported products and more than one quarter of export value from Belgian manufacturers are in goods that are not produced by the firm, so-called Carry-Along Trade (CAT). CAT exports are concentrated in the largest and most productive firms and the value of CAT exports responds differently to variation in firm productivity and trade costs than does the export value of goods that the firm produces.

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Paper provided by National Bank of Belgium in its series Working Paper Research with number 203.

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Length: 60 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:nbb:reswpp:201010-203
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