Authors:

  • Marc Melitz

Excerpt

Product Mix and Firm Productivity Responses to Trade Competition. Marc Melitz, December 2014, Paper. "In this paper, we document how demand shocks in export markets lead French multi-product exporters to re-allocate the product mix sold in those destinations. We develop a theoretical model of multi-product firms that highlight the specific demand and cost conditions needed to generate all those empirical predictions. We then show how the increased competition from the demand shocks in export markets - and the associated product mix responses - lead to substantial productivity improvements for multi-product exporters. Recent studies..." Link