Multi-product Exporters Research Articles

Multi-Product Exporters and the Margins of Trade

The present paper examines multi-product exporters in Belgium, considering their importance and the relationship between the margins of trade and firm productivity. We use proxies for trade costs to quantify the extensive and intensive margin adjustments of trade. Relatively few exporting firms account for the majority of Belgian exports and these large firms have greater productivity and value-added, more employees and more exported products than smaller exporters. Across firms, productivity is positively associated with firm exports. More productive firms export more products to more countries and have higher average product-country export flows. The extensive and intensive margins are equally important in total firm exports. © 2014 Japanese Economic Association.

How do Multiproduct Exporters React to a Change in Trade Costs?*

AbstractWe use data on individual French exporters to document how a change in trade costs, following the introduction of the euro, affected the export margins of firms in relation to export decisions, the number of products exported, and the average sales per product. Our results confirm two effects predicted by the theory: firms increase the range of products they export as well as their intensive margin. This effect is most evident in markets with moderate monetary policy coordination before 1999. General equilibrium competition effects reduce the initial positive impact on each of these margins. We find no evidence that firms increase their participation in the export market.

Multi-Product Exporters and the Margins of Trade

This paper examine multi-product exporters in Belgium, considering their importance and the relationship between the margins of trade and firm productivity. We employ proxies for trade costs to quantify the extensive and intensive margin adjustments of trade. Relatively few exporting firms account for the majority of Belgian exports and these large firms have greater productivity and value-added, more employees and exported products. Across firms, productivity is positively associated with firm exports. More productive firms export more products to more countries and have higher average product-country export flows. The extensive and intensive margins are equally important in total firm exports.

Multi-Product Exporters, Carry-Along Trade and the Margins of Trade

New empirical and theoretical work has highlighted the importance of multi-product …rms in international trade ‡ows. We examine multi-product exporters in the small open economy of Belgium, considering their importance and the relationship between the margins of trade and …rm productivity, both across …rms and within …rms 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 …rm-product level, we discover new and, heretofore, unknown facts about multi-product manufacturing exporters. The large majority of Belgian manufacturing …rms 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 …rm, so-called Carry-Along Trade (CAT). CAT exports are concentrated in the largest

The Extensive Margin of Exporting Products: A Firm-Level Analysis

We examine multi-product exporters and use firm-product-destination data to quantify export entry barriers. Our general-equilibrium model of multi-product firms generalizes earlier models. To match main facts about multi-product exporters, we estimate our model with rich demand and access cost shocks for Brazilian firms. The estimates document that additional products farther from a firm’s core competency incur higher unit costs, but face lower market access costs. We find that these market access costs differ across destinations and evaluate a scenario that standardizes market access between countries. The resulting welfare gains are similar to eliminating all current tariffs.

How Do Multiproduct Exporters React to a Change in Trade Costs?

Recent literature has highlighted the major contribution of multi-product firms to international trade activity. Such firms ship several product categories to foreign destinations each time they export. Our objective is to document the contribution of product selection to the reaction of firms further to a change in trade costs. For this, we make use of French firm-level export data, combined with a survey detailing exporters' characteristics. We first show that distance has a negative effect on all dimensions of firms' exports: the export decision, the number of products exported and the average value of exports by product. This contrasts with estimations using annual shipments at the country level, where distance is found to have no effect on the intensive margin. We then use the euro adoption in 1999 as a natural experiment to explore the effects of a change in trade costs over time. We find that, following this change, only the most productive firms increased the number of products that they export to eurozone destinations. No effect is found on the decision to export and the value of exports by product. Where monetary policy coordination preceded, some of the least productive firms stopped exporting or concentrated their exports over a smaller range of product categories, consistent with a tougher competitive environment on eurozone markets after 1999. Overall, our results show that firms' adjustments are made overwhelmingly through changes in the number of products exported.

Optimal hedging on futures markets for commodity-exporting nations

This paper utilises portfolio theory to examine the usefulness of futures markets to commodity-exporting nations. The theory of optimal hedging is extended to multi-product exporters and applied to a sample of cocoa, coffee and sugar exporting nations which face both price and quantity risks. It is found that the optimal hedging-strategy differs considerably across nations, although they should all sell futures contracts totalling much less than expected exports and in many cases they should even buy futures. It appears that futures markets may offer some (but not all) countries an attractive means of reducing year-to-year fluctuations in export-revenues.