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Author: Jangho Choi
Publisher:
ISBN:
Category : Exports
Languages : en
Pages : 80
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Book Description
The objective of this dissertation is to examine multi-product firms' productivity and export behavior. More specifically, this dissertation estimates productivity of firms that produce and sell multiple products, and the role of productivity in such firms' export behavior. In doing so, this dissertation develops a firm-level gravity approach to test whether multi-product firms self select to export or learn from exporting. In the first of part of this dissertation, I examine whether intra-firm resource reallocation of a multi-product firm affects its Total Factor Productivity (TFP). By extending earlier approaches, I estimate unbiased and consistent TFP of multi-product firms using a revenue-based production function. I find that TFP is more likely to be overestimated when multi-product firms' internalized demand linkage is not taken into account. I also find that multi-product firms' TFP decreases as it expands the number of products produced, but specialization of production does not play a role in TFP. In the second part, I present a theoretical framework to derive a firm-level gravity equation. By equating the total demand and total production of multi-product firms, I derive a firm-level gravity equation where export flows from firms to consumers is proportional to the product of economic size of firms, consuming power of a representative consumer, and trade resistance between origin and destination. Using the firm-level gravity equation, I test the hypothesis that high productivity firms self select to export and that the size of export flows is determined by productivity. I find that the economic size of exporting firms and the consuming power of a representative consumer have a positive and statistically significant effect on exports, while trade resistance such as tariff and distance have the opposite effect. I also find that the estimated coefficients of the firm-level gravity equation tend to be smaller than those of the traditional country-level gravity equation. In the final part of the dissertation, I test whether or not previous export experience improves the productivity of firms. Again, the estimable equation is derived from the equilibrium condition presented in the second part. My result confirms that previous export experience indeed improves productivity of exporting firms, but tariffs have the opposite effect. The results of this dissertation reveal the economic behavior of multi-product firms, which usually account for a large of economic activity and output in many countries. Understanding such firms' productivity and export behavior can offer strategies for economic growth and development. Empirical findings of this dissertation suggest policy options including lowering tariffs, and improving infrastructure that can lower transportation costs. Further examination of product range and specialization of production can offer strategies to source exports from small and midsize firms.
Author: Jangho Choi
Publisher:
ISBN:
Category : Exports
Languages : en
Pages : 80
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Book Description
The objective of this dissertation is to examine multi-product firms' productivity and export behavior. More specifically, this dissertation estimates productivity of firms that produce and sell multiple products, and the role of productivity in such firms' export behavior. In doing so, this dissertation develops a firm-level gravity approach to test whether multi-product firms self select to export or learn from exporting. In the first of part of this dissertation, I examine whether intra-firm resource reallocation of a multi-product firm affects its Total Factor Productivity (TFP). By extending earlier approaches, I estimate unbiased and consistent TFP of multi-product firms using a revenue-based production function. I find that TFP is more likely to be overestimated when multi-product firms' internalized demand linkage is not taken into account. I also find that multi-product firms' TFP decreases as it expands the number of products produced, but specialization of production does not play a role in TFP. In the second part, I present a theoretical framework to derive a firm-level gravity equation. By equating the total demand and total production of multi-product firms, I derive a firm-level gravity equation where export flows from firms to consumers is proportional to the product of economic size of firms, consuming power of a representative consumer, and trade resistance between origin and destination. Using the firm-level gravity equation, I test the hypothesis that high productivity firms self select to export and that the size of export flows is determined by productivity. I find that the economic size of exporting firms and the consuming power of a representative consumer have a positive and statistically significant effect on exports, while trade resistance such as tariff and distance have the opposite effect. I also find that the estimated coefficients of the firm-level gravity equation tend to be smaller than those of the traditional country-level gravity equation. In the final part of the dissertation, I test whether or not previous export experience improves the productivity of firms. Again, the estimable equation is derived from the equilibrium condition presented in the second part. My result confirms that previous export experience indeed improves productivity of exporting firms, but tariffs have the opposite effect. The results of this dissertation reveal the economic behavior of multi-product firms, which usually account for a large of economic activity and output in many countries. Understanding such firms' productivity and export behavior can offer strategies for economic growth and development. Empirical findings of this dissertation suggest policy options including lowering tariffs, and improving infrastructure that can lower transportation costs. Further examination of product range and specialization of production can offer strategies to source exports from small and midsize firms.
Author: Andrew B. Bernard
Publisher:
ISBN:
Category : Free trade
Languages : en
Pages : 66
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Book Description
This paper develops a general equilibrium model of multi-product firms and analyzes their behavior during trade liberalization. Firm productivity in a given product is modeled as a combination of firm-level "ability" and firm-product-level "expertise", both of which are stochastic and unknown prior to the firm's payment of a sunk cost of entry. Higher firm-level ability raises a firm's productivity across all products, which induces a positive correlation between a firm's intensive (output per product) and extensive (number of products) margins. Trade liberalization fosters productivity growth within and across firms and in aggregate by inducing firms to shed marginally productive products and forcing the lowest-productivity firms to exit. Though exporters produce a smaller range of products after liberalization, they increase the share of products sold abroad as well as exports per product. All of these adjustments are shown to be relatively more pronounced in countries' comparative advantage industries.
Author: Van Pham
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Robert J. R. Elliott
Publisher:
ISBN:
Category : Exports
Languages : en
Pages : 48
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Author: Hong Ma
Publisher:
ISBN:
Category :
Languages : en
Pages : 300
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Author: Ana Fernandes
Publisher: International Monetary Fund
ISBN: 1484386175
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
The Melitz model highlights the importance of the extensive margin (the number of firms exporting) for trade flows. Using the World Bank’s Exporter Dynamics Database (EDD) featuring firm-level exports from 50 countries, we find that around 50 percent of variation in exports is along the extensive margin—a quantitative victory for the Melitz framework. The remaining 50 percent on the intensive margin (exports per exporting firm) contradicts a special case of Melitz with Pareto-distributed firm productivity, which has become a tractable benchmark. This benchmark model predicts that, conditional on the fixed costs of exporting, all variation in exports across trading partners should occur on the extensive margin. We find that moving from a Pareto to a lognormal distribution allows the Melitz model to match the role of the intensive margin in the EDD. We use likelihood methods and the EDD to estimate a generalized Melitz model with a joint lognormal distribution for firm-level productivity, fixed costs and demand shifters, and use “exact hat algebra” to quantify the effects of a decline in trade costs on trade flows and welfare in the estimated model. The welfare effects turn out to be quite close to those in the standard Melitz-Pareto model when we choose the Pareto shape parameter to fit the average trade elasticity implied by our estimated Melitz-lognormal model, although there are significant differences regarding the effects on trade flows.
Author: Parisa Kamali
Publisher: International Monetary Fund
ISBN: 1513519875
Category : Business & Economics
Languages : en
Pages : 58
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Book Description
In many countries, a sizable share of international trade is carried out by intermediaries. While large firms tend to export to foreign markets directly, smaller firms typically export via intermediaries (indirect exporting). I document a set of facts that characterize the dynamic nature of indirect exporting using firm-level data from Vietnam and develop a dynamic trade model with both direct and indirect exporting modes and customer accumulation. The model is calibrated to match the dynamic moments of the data. The calibration yields fixed costs of indirect exporting that are less than a third of those of direct exporting, the variable costs of indirect exporting are twice higher, and demand for the indirectly exported products grows more slowly. Decomposing the gains from indirect and direct exporting, I find that 18 percent of the gains from trade in Vietnam are generated by indirect exporters. Finally, I demonstrate that a dynamic model that excludes the indirect exporting channel will overstate the welfare gains associated with trade liberalization by a factor of two.
Author: Andrew B. Bernard
Publisher:
ISBN:
Category :
Languages : en
Pages : 23
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Book Description
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.
Author: Leo Iacovone
Publisher:
ISBN:
Category :
Languages : en
Pages : 37
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Book Description
Recent developments in trade theory, especially research on multi-product firms, have not been matched by similar progress on the empirical front. This paper aims to fill this gap by presenting a novel set of stylized facts on firm-product dynamics observed during an export boom. This exercise is possible thanks to a unique firm-product level dataset covering about 85 percent of Mexican industrial output for the period 1994-2003. The main findings are as follows. First, there is a substantial degree of product turnover at the firm-product level in response to declining trade costs. Second,quot;core competenciesquot; - the fact that firms have a cost advantage or greater expertise at manufacturing some of their products - are the main driver of firms' decision to introduce or drop export products. Third, new exporters tend to quot;start smallquot; in terms of both values and number of exported products. Fourth, even if the expansion in the number of exported products played a role in stimulating Mexican exports, the growth in volume of pre-existing products was the main driver of the export boom. Finally, the introduction of new export products is preceded by a surge in investment. These findings are in line with many, but not all, predictions of recent theoretical work.
Author: Lin Sun
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Whether there exists a dual-product market in China. In fact, there are obvious distribution differences between low-end products and high-end products, which are dominated by low-end products in a "pyramid" shape. This paper explores the resource allocation in multi-product firms based on the perspective of dual-products, which is an important part of achieving high-quality development of trade. This paper explores the impact of the market size of destination on the export product mix of China's multi-product firms. It is found that with the expansion of the market size of destination, China's multi-product firms will be more inclined to export and sell their core products. Furthermore, this paper explores two intermediate mechanisms: competition effect and digital effect, both of which can effectively promote the "tilt effect" of the market size of destination on the export products of multi-product firms.
