The Extensive Margin of Exporting Products: A Firm-level Analysis
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.
Arkolakis, Costas; Ganapati, Sharat; and Muendler, Marc-Andreas, "The Extensive Margin of Exporting Products: A Firm-level Analysis" (2016). Cowles Foundation Discussion Papers. 2472.