CFDP 2028

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

Author(s): 

Publication Date: January 2016

Pages: 59

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 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.

Keywords: 

International trade; Heterogeneous firms; Multi-product firms; Firm and product panel data; Brazil

JEL Classification Codes:  F12, L11, F14