Bridging Trade Barriers: Evaluating Models of Multi-Product Exporters
Author
Summary, in English
In this paper we investigate the impact of a decrease in trade costs on firm decisions to export. The main contribution of this paper is to evaluate empirically the theoretical predictions of several models of multi-product exporters. The focus is on the firm export entry decision and the within firm adjustment regarding product scope and intensity. For identification, a quasi-natural experiment, the introduction of the Öresund bridge between southern Sweden and Denmark, is used to analyse the impact on firm behaviour. Using a difference-in-difference methodology, firms in the ’treated’ municipality, Malmö, are compared to firms in the more geographically distant Gothenburg ('control'). For the 'treated' firms a theoretically consistent positive effect is found on firm entry into exporting, aggregate firm trade flow and the number of products exported. While the models of multi-product exporters evaluated do not provide a clear theoretical prediction regarding the impact on average trade value per product, we find a sizeable significant effect. Decomposing the results, we find that the main effects are driven by firms in the manufacturing sectors. The results are robust to extending the sample to include Stockholm as well as exports to alternative destinations.
Department/s
Publishing year
2015
Language
English
Publication/Series
Working Paper / Department of Economics, School of Economics and Management, Lund University
Issue
6
Links
Document type
Working paper
Publisher
Department of Economics, Lund University
Topic
- Economics
Keywords
- International Trade
- Multi-Product Firms
- Infrastructure
- Market Access
- Quasi-Natural Experiment
- Trade Costs
Status
Published