Work

Testing the Core‐competency Model of Multi‐product Exporters

Year: 2016

Type: article

Abstract: We review the implications of the “core‐competence” model of multi‐product firms, including the “market‐size puzzle”: for most countries, the world market is much larger than the home market, while the costs of accessing foreign markets are relatively low; hence the model predicts that most domestic firms should export more of their core products than they sell domestically; yet, in practice, we do not observe this. Extending the model to allow for investment in export market penetration resolves the puzzle and Mexican data confirm its predictions: in particular, only the largest firms exhibit the dominance of exports over home sales.

Source: Review of International Economics

DOI: 10.1111/roie.12234

Authors: Carsten Eckel, Leonardo Iacovone, Beata Javorcik, J. Peter Neary

Institutions: Ludwig-Maximilians-Universität München, World Bank, University of Oxford

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,350