Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries

Recent research on international trade focuses on firm-product-level heterogeneity and the role of uncertainty in shaping international trade. This article contributes to the literature by examining product-level dynamics within firms in the context of Mexican trade integration under NAFTA. The data...

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Bibliographic Details
Published in:The Economic journal (London) 2010-05, Vol.120 (544), p.481-499
Main Authors: Iacovone, Leonardo, Javorcik, Beata S
Format: Article
Language:English
Subjects:
Economic integration
Economic uncertainty
Exporters
Exports
Firm Behavior: Empirical Analysis D220
Industrial organization
Industrial prices
Integration
International Business F230
International economics
International trade
Military uniforms
Modeling
Multinational Firms
NAFTA
New products
North America
Product management
Production Management M110
Production, Pricing, and Market Structure
School uniforms
Size Distribution of Firms L110
Studies
Tariffs
Trade liberalization
Uncertainty
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Summary:Recent research on international trade focuses on firm-product-level heterogeneity and the role of uncertainty in shaping international trade. This article contributes to the literature by examining product-level dynamics within firms in the context of Mexican trade integration under NAFTA. The data show intense product churning within firms and confirm the existence of within-firm product heterogeneity. The data indicate that new exporters enter foreign markets with a small number of varieties, most of which were previously sold at home, and with a small export small volume. The data also suggest that export discoveries are relatively rare and are imitated within a short period of time.
ISSN:0013-0133
1468-0297
DOI:10.1111/j.1468-0297.2010.02356.x