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Product and destination mix in export markets

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  • João Amador
  • Luca Opromolla

Abstract

This article studies the joint destination and product strategies of exporters, using the universe of export transactions for firms located in Portugal in the period 1995–2005. The article breaks down the annual growth rate of total exports along different margins and details choices made by multi-product, multi-destination firms regarding their export portfolio. In addition, the article looks at similar features for the subsample of new exporters. We find that both the firm-level extensive and intensive margins are important in driving the year-to-year variation in aggregate exports. However, variation over time in the sales of continuing exporters is mainly driven by their sales in continuing destinations. In addition, a product’s export tenure within a firm varies largely across currently exported products in the context of an intense activity of product and destination switching. Moreover, the higher the importance of a product, the more its sales are concentrated in the firm’s top destination. Finally, the article finds that, while continuing exporters enter new markets mainly by selling old products, new exporters access new destinations mainly by exporting new products. Copyright Kiel Institute 2013

Suggested Citation

  • João Amador & Luca Opromolla, 2013. "Product and destination mix in export markets," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 23-53, March.
    • Handle: RePEc:spr:weltar:v:149:y:2013:i:1:p:23-53
    DOI: 10.1007/s10290-012-0136-z
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    More about this item

    Keywords

    Multi-product firm; Product scope; Market penetration; Exports; F1; L25; D21;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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