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Entry on Export Markets and Firm-Level Performance Growth: Intra-Industrial Convergence or Divergence?

Author

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  • Florian Mayneris

    (CORE)

Abstract

This paper investigates theoretically and empirically the endogenous investment decision of firms conditioning on export decision. It shows that theoretically, whatever the form of preferences, firms that start exporting invest more and grow more than the others. However, it is shown that when preferences are CES, within each category of firms (domestic and switchers), initial productivity and investment are strategic complements, inducing intra-industrial divergence. On the contrary, when preferences are quadratic, initial productivity and investment are strategic substitutes: less productive firms invest more and grow more than the others, inducing intra-industrial convergence. Empirical results on French data support the predictions of the quadratic preferences model.

Suggested Citation

  • Florian Mayneris, 2010. "Entry on Export Markets and Firm-Level Performance Growth: Intra-Industrial Convergence or Divergence?," Working Papers 2010.153, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2010.153
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    Cited by:

    1. Wang, Fang, 2014. "Complementarities between R&D investment and exporting—Evidence from China," China Economic Review, Elsevier, vol. 31(C), pages 217-227.

    More about this item

    Keywords

    Export Decision; Investment; Firm Heterogeneity;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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