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Why do similar firms export differently?

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  • Boitier, Vincent

Abstract

Eaton et al. (2011) underline that firms with similar production costs, entry costs and demand export to different countries. In this theoretical article, I provide a rationale for this feature of the data. I demonstrate that similar firms exporting differently can be explained by a baseline trade-off between attractiveness and competition that is present in any model with monopolistic competition. I then show that this trade-off also generates valuable theoretical features including distance-related mark-ups, third country effect and equivalence with random utility models.

Suggested Citation

  • Boitier, Vincent, 2022. "Why do similar firms export differently?," Research in Economics, Elsevier, vol. 76(4), pages 373-385.
    • Handle: RePEc:eee:reecon:v:76:y:2022:i:4:p:373-385
    DOI: 10.1016/j.rie.2022.09.002
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    References listed on IDEAS

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    1. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(2), pages 217-235.
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    More about this item

    Keywords

    Firms’ location; Attractiveness; Competition; Dispersion in strategies; Potential function;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • F10 - International Economics - - Trade - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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