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

By Costas Arkolakis, Marc-Andreas Muendler. American Economic Journal: Macroeconomics, 2010

314 citations recorded by the source corpus.

To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand and market access cost shocks. Our estimates show that additional products farther from a firm’s core competency come at higher production costs, but there are substantive economies of scope in market access costs. Market access costs differ across destinations, falling more rapidly in scope at nearby regions and at destinations with fewer nontariff barriers. We evaluate a counterfactual scenario that harmonizes market access costs across destinations and find global welfare gains similar to eliminating all current tariffs. (JEL D22, F12, F13, F14, O14, O19)

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0a35a0d301e87db18645477e83ad781dce433a27

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Citations in the corpus

Temporary trade and heterogeneous firms (2012, background): “In Arkolakis and Muendler (2010), firms first incur a broad market-entry cost and then an additional fixed product-entry cost that is in line with the magnitude of the particular overseas presence.”
Prices, Markups and Trade Reform (2016, background): “(2003), Goldberg and Verboven (2005), Atkeson and Burstein (2008), Melitz and Ottaviano (2008), Feenstra and Weinstein (2010), Nakamura and Zerom (2010), Edmonds et al. (2011), Goldberg and Hellerstein (2013), Arkolakis et al.”
Multi-Product Firms and Product Quality (2017, unknown): “These multi-product rms typically concentrate sales in a few core products that generate the majority of cross-border ows and rm export pro ts (Bernard et al. 2009, Arkolakis and Muendler 2010).”
Theories of Heterogeneous Firms and Trade (2011, unknown): “…for each firm ability can be expressed as: λ∗d (ϕ) = ( ϕ∗d ϕ ) λ∗d (ϕ ∗ d) , λ ∗ x (ϕ) = ( ϕ∗x ϕ ) λ∗x (ϕ ∗ x) 27Other recent models of multi-product firms and trade include Arkolakis & Muendler (2010), Eckel & Neary (2010), Feenstra & Ma (2008), Mayer et al. (2010), and Nocke & Yeaple (2006).”
The Empirics of Firm Heterogeneity and International Trade (2012, background): “In Arkolakis & Muendler (2010), rms face declining productivity for each additional variety supplied to a market and market entry costs that are increasing in the number of varieties supplied to a market.”
Countercyclical Restructuring and Jobless Recoveries (2012, background): “Bandpass lter isolating periods [6-32] Source: BLS Labor Productivity and Costs”