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

Costas Arkolakis, Sharat Ganapati, Marc-Andreas Muendler

Current draft: Dec 18, 2015
First draft: Nov 13, 2007

University of California, San Diego


abstract

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 also show large economies of scope in market access costs that differ across destinations. We evaluate a scenario that eliminates differential market access costs across countries and show that it generates welfare gains similar to eliminating current tariffs.

keywords: International trade; heterogeneous firms; multi-product firms; firm and product panel data; Brazil

jel: F12, L11, F14


background

  • online supplement [pdf 430k]
  • nber working paper [16641] version
  • companion paper in continuous product space with generalizations: CESifo Economic Studies 2013, 59(2): 223-248 [doi html]
  • replication code
    • data preparation and reduced-form estimation in stata [zip 322k] (12/18/2015)
      code is documented in, and directly executable through, executable %OrderOfPrograms.do
    • estimation and simulation in matlab 5 [zip 220k] (9/3/2014)
      code is documented in, and directly executable through, master_script.m
    • converter sitc2isic [csv 13k] [stata9 51k]
      converter documentation [pdf 118k]
  • data sources
    • previous data documentation (additional tables and graphs) [pdf 5.8M]
    • exporter and product data SECEX (description by OECD)
    • formal employer and employee census RAIS (in portuguese)