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Fickle product mix: exporters adapting their product vectors across markets

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  • Lionel Fontagne
  • Angelo Secchi
  • Chiara Tomasi

Abstract

This paper analyzes how multi-product firms adjust their exported product-mix across desti- nations. Using cross sections of Italian and French data, we show that firms do not follow a rigid ordering in their product mix exported in different markets but rather they adapt their choices to better match with country characteristics. By using metrics based on export shares and on sequences of product names we provide new insights on the extent a firm's products portfolio changes across destinations that go beyond simple rank correlations. Demand asymmetries, mar- ket structure heterogeneity and differential abilities to match unit values of products supplied by competitors emerge as three significant factors in explaining the variety-country variability observed in firms' export patterns. Our results resist when we control for a firm's choice of not exporting an available product to a given destination, an explicit choice likely to contain relevant information.

Suggested Citation

  • Lionel Fontagne & Angelo Secchi & Chiara Tomasi, 2014. "Fickle product mix: exporters adapting their product vectors across markets," LEM Papers Series 2014/26, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  • Handle: RePEc:ssa:lemwps:2014/26
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    References listed on IDEAS

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    1. Costas Arkolakis & Marc-Andreas Muendler, 2010. "The Extensive Margin of Exporting Products: A Firm-level Analysis," CESifo Working Paper Series 3309, CESifo.
    2. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, September.
    3. Francesco Di Comite & Jacques-François Thisse & Hylke Vandenbussche, 2011. "Verti-zontal differentiation in monopolistic competition," Working Paper Research 216, National Bank of Belgium.
    4. Eckel, Carsten & Iacovone, Leonardo & Javorcik, Beata & Neary, J. Peter, 2015. "Multi-product firms at home and away: Cost- versus quality-based competence," Journal of International Economics, Elsevier, vol. 95(2), pages 216-232.
    5. Costas Arkolakis & Marc-Andreas Muendler, 2013. "Exporters and Their Products: A Collection of Empirical Regularities," CESifo Economic Studies, CESifo, vol. 59(2), pages 223-248, June.
    6. Andrew B. Bernard & Andreas Moxnes & Karen Helene Ulltveit-Moe, 2018. "Two-Sided Heterogeneity and Trade," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 424-439, July.
    7. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    8. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
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    Cited by:

    1. Valeria Gattai, 2015. "Foreign exposure and heterogeneous performance of Italian firms: A survey of the empirical literature (1992-2014)," Working Papers 300, University of Milano-Bicocca, Department of Economics, revised Apr 2015.

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    Keywords

    multi-product; multi-country firms; product vectors; demand and concentration;

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