NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Market Size, Competition, and the Product Mix of Exporters

Thierry Mayer, Marc J. Melitz, Gianmarco I.P. Ottaviano

NBER Working Paper No. 16959
Issued in April 2011
NBER Program(s):   ITI

We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export market induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Theoretically, this within firm change in product mix driven by the trading environment has important repercussions on firm productivity. A calibrated fit to our theoretical model reveals that these productivity effects are potentially quite large.

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This paper was revised on March 20, 2013

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Document Object Identifier (DOI): 10.3386/w16959

Published: Thierry Mayer & Marc J. Melitz & Gianmarco I. P. Ottaviano, 2014. "Market Size, Competition, and the Product Mix of Exporters," American Economic Review, American Economic Association, vol. 104(2), pages 495-536, February. citation courtesy of

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