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Market Size, Distance and Export Margins of Multi-product Firms
Stockholm University, Faculty of Social Sciences, Department of Economics.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper presents consistent empirical findings on impacts of the distance to and the market size of destination markets on the export margins of multi-product firms using detailed firm-level data from Sweden. A decomposition of the respective positive and negative impacts of market size and distance on aggregate exports reveals the dominant impact of the extensive margin. The paper presents evidence consistent with the economies of scope idea emphasized in Arkolakis et al. (2014) as well as on the importance of the composition of firms exporting to destinations of different size and distance from the home country as in Bernard et al. (2011). Unlike similar papers in the area, this paper uses firm-destination level data. In this case, the intra-firm intensive margin impact of both market size and distance appears to dominate. Moreover, the paper presents evidence that supports the prediction by Chaney (2008) and Krugman (1980) that the elasticity of substitution magnifies the impact of trade barriers on the intensive margin. Finally, the paper shows that firms exporting to larger and/or less remote destinations tend to skew their export sales towards their better performing products as predicted in Mayer et al. (2014).

Keyword [en]
Heterogeneous Firms, Multi-product firms, Market size, Distance, Sweden
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:su:diva-136998OAI: oai:DiVA.org:su-136998DiVA: diva2:1058216
Available from: 2016-12-20 Created: 2016-12-20 Last updated: 2017-01-09
In thesis
1. Essays in International trade, exchange rates and prices
Open this publication in new window or tab >>Essays in International trade, exchange rates and prices
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of three self-contained essays in International Trade, Exchange Rates and Prices. Although independent, these essays share some common themes. The first two papers can be related to the vast literature on exchange rate pass-through to prices. While the first paper uses firm-product level data from Sweden to study firms’ export price response to movements in exchange rate, the second paper employs aggregate level data from Ethiopia and looks at the issue from the importers’ perspective. The third paper, like the first paper, uses Swedish firm-level data and investigates firms’ exporting behavior. The third paper, however, specifically focuses on export margins of multi-product firms and studies their response when exporting to destinations of different size and distance from the home country.

Place, publisher, year, edition, pages
Stockholm: Department of Economics, Stockholm University, 2017. 17 p.
Series
Dissertations in Economics, ISSN 1404-3491 ; 2017:1
Keyword
Heterogeneous Firms, Multi-product firms, Exports, Market size, Distance, Exchange rates, Exchange Rate Pass-through, Inflation, SVAR, Sweden, Ethiopia
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:su:diva-137002 (URN)978-91-7649-608-4 (ISBN)978-91-7649-609-1 (ISBN)
Public defence
2017-02-14, Nordenskiöldsalen, Geovetenskapens hus, Svante Arrhenius väg 12, Stockholm, 13:00 (English)
Opponent
Supervisors
Note

At the time of the doctoral defense, the following papers were unpublished and had a status as follows: Paper 1: Manuscript. Paper 2: Manuscript. Paper 3: Manuscript.

Available from: 2017-01-20 Created: 2016-12-20 Last updated: 2017-01-27Bibliographically approved

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