[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/jku/econwp/2022-01.html
   My bibliography  Save this paper

Multi-product Firms in International Economics

Author

Listed:
  • Michael Irlacher
Abstract
A striking pattern in transaction-level data is the concentration of international shipments in the hands of a few large firms. One common feature of dominating high-performance firms is that they produce multiple products and ship them to many destinations. Motivated by the emergence of highly detailed data at the firm-product-destination level, a series of theoretical and empirical papers studies the role of multi-product firms (MPFs) in international trade. This survey reviews the evidence on the importance of MPFs in international markets and highlights the key theoretical as well as empirical results that the literature has produced in the last decade.

Suggested Citation

  • Michael Irlacher, 2022. "Multi-product Firms in International Economics," Economics working papers 2022-01, Department of Economics, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:econwp:2022-01
    Note: English
    as

    Download full text from publisher

    File URL: http://www.econ.jku.at/papers/2022/wp2201.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Qiu, Larry D. & Zhou, Wen, 2013. "Multiproduct firms and scope adjustment in globalization," Journal of International Economics, Elsevier, vol. 91(1), pages 142-153.
    2. Thierry Mayer & Marc J. Melitz & Gianmarco I. P. Ottaviano, 2021. "Market Size, Competition, and the Product Mix of Exporters," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 5, pages 109-150, World Scientific Publishing Co. Pte. Ltd..
    3. Pinelopi K Goldberg & Amit K Khandelwal & Nina Pavcnik & Petia Topalova, 2010. "Multiproduct Firms and Product Turnover in the Developing World: Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 1042-1049, November.
    4. Lisandra Flach & Michael Irlacher, 2018. "Product versus Process: Innovation Strategies of Multiproduct Firms," American Economic Journal: Microeconomics, American Economic Association, vol. 10(1), pages 236-277, February.
    5. Swati Dhingra, 2013. "Trading Away Wide Brands for Cheap Brands," American Economic Review, American Economic Association, vol. 103(6), pages 2554-2584, October.
    6. Marc J. Melitz & Giancarlo I. P. Ottaviano, 2021. "Market Size, Trade, and Productivity," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 4, pages 87-108, World Scientific Publishing Co. Pte. Ltd..
    7. Arpita Chatterjee & Rafael Dix-Carneiro & Jade Vichyanond, 2013. "Multi-product Firms and Exchange Rate Fluctuations," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 77-110, May.
    8. Fontagné, Lionel & Secchi, Angelo & Tomasi, Chiara, 2018. "Exporters’ product vectors across markets," European Economic Review, Elsevier, vol. 110(C), pages 150-180.
    9. Costas Arkolakis & Sharat Ganapati & Marc-Andreas Muendler, 2021. "The Extensive Margin of Exporting Products: A Firm-Level Analysis," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(4), pages 182-245, October.
    10. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    11. Christian Broda & David E. Weinstein, 2010. "Product Creation and Destruction: Evidence and Price Implications," American Economic Review, American Economic Association, vol. 100(3), pages 691-723, June.
    12. Eckel, Carsten & Iacovone, Leonardo & Javorcik, Beata & Neary, J. Peter, 2015. "Multi-product firms at home and away: Cost- versus quality-based competence," Journal of International Economics, Elsevier, vol. 95(2), pages 216-232.
    13. Runjuan Liu, 2010. "Import competition and firm refocusing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(2), pages 440-466, May.
    14. Antoine Berthou & Lionel Fontagné, 2013. "How do Multiproduct Exporters React to a Change in Trade Costs?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 326-353, April.
    15. Thierry Mayer & Gianmarco Ottaviano, 2008. "The Happy Few: The Internationalisation of European Firms," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 43(3), pages 135-148, May.
    16. Mauro Caselli & Arpita Chatterjee & Alan Woodland, 2017. "Multi‐product exporters, variable markups and exchange rate fluctuations," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(4), pages 1130-1160, November.
    17. Bee, Marco & Riccaboni, Massimo & Schiavo, Stefano, 2017. "Where Gibrat meets Zipf: Scale and scope of French firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 481(C), pages 265-275.
    18. Aw, Bee Yan & Lee, Yi, 2017. "Demand, costs and product scope in the export market," European Economic Review, Elsevier, vol. 100(C), pages 28-49.
    19. Parenti, Mathieu, 2018. "Large and small firms in a global market: David vs. Goliath," Journal of International Economics, Elsevier, vol. 110(C), pages 103-118.
    20. Thierry Mayer & Gianmarco I.P. Ottaviano, 2008. "The Happy Few: New Facts on the Internationalization of European Firms Based on Firm-level Evidence," L'industria, Società editrice il Mulino, issue 2, pages 221-244.
    21. 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.
    22. Carsten Eckel & J. Peter Neary, 2010. "Multi-Product Firms and Flexible Manufacturing in the Global Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(1), pages 188-217.
    23. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
    24. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    25. Colin J. Hottman & Stephen J. Redding & David E. Weinstein, 2016. "Quantifying the Sources of Firm Heterogeneity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(3), pages 1291-1364.
    26. Flach, Lisandra & Irlacher, Michael & Unger, Florian, 2021. "Corporate taxes and multi-product exporters: Theory and evidence from trade dynamics," Journal of International Economics, Elsevier, vol. 132(C).
    27. Ma, Yue & Tang, Heiwai & Zhang, Yifan, 2014. "Factor Intensity, product switching, and productivity: Evidence from Chinese exporters," Journal of International Economics, Elsevier, vol. 92(2), pages 349-362.
    28. Meng, Ning & Milner, Chris & Song, Huasheng, 2020. "Antidumping and heterogeneous quality adjustment of multi-product firms: Evidence from Chinese exporters," Economic Modelling, Elsevier, vol. 92(C), pages 147-161.
    29. Jože P. Damijan & Jozef Konings & Sašo Polanec, 2014. "Import Churning and Export Performance of Multi-product Firms," The World Economy, Wiley Blackwell, vol. 37(11), pages 1483-1506, November.
    30. Leonardo Iacovone & BeataS. Javorcik, 2010. "Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries," Economic Journal, Royal Economic Society, vol. 120(544), pages 481-499, May.
    31. Holger Görg & Richard Kneller & Balázs Muraközy, 2012. "What makes a successful export? Evidence from firm‐product‐ level data," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1332-1368, November.
    32. Iacovone, Leonardo & Rauch, Ferdinand & Winters, L. Alan, 2013. "Trade as an engine of creative destruction: Mexican experience with Chinese competition," Journal of International Economics, Elsevier, vol. 89(2), pages 379-392.
    33. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity (DOI:10.111/j.1467-937x.2007.00463.x)," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(3), pages 985-985.
    34. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    35. Timoshenko, Olga A., 2015. "Product switching in a model of learning," Journal of International Economics, Elsevier, vol. 95(2), pages 233-249.
    36. John Baldwin & Wulong Gu, 2009. "The Impact of Trade on Plant Scale, Production-Run Length and Diversification," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 557-592, National Bureau of Economic Research, Inc.
    37. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
    38. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2009. "Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 513-552, National Bureau of Economic Research, Inc.
    39. Lucas Navarro, 2012. "Plant level evidence on product mix changes in Chilean manufacturing," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(2), pages 165-195, February.
    40. Manova, Kalina & Yu, Zhihong, 2017. "Multi-product firms and product quality," Journal of International Economics, Elsevier, vol. 109(C), pages 116-137.
    41. Michael Irlacher, 2018. "Multi-product firms and gains from trade through intra-firm adjustments," Economics Bulletin, AccessEcon, vol. 38(4), pages 2266-2272.
    42. Vandenbussche, Hylke & Viegelahn, Christian, 2018. "Input reallocation within multi-product firms," Journal of International Economics, Elsevier, vol. 114(C), pages 63-79.
    43. Valerie Smeets & Frederic Warzynski & Amil Petrin & Emmanuel Dhyne, 2017. "Multi-Product Firms, Import Competition, and the Evolution of Firm-product Technical Efficiencies," 2017 Meeting Papers 242, Society for Economic Dynamics.
    44. Xu, Jiayun & Mao, Qilin & Tong, Jiadong, 2016. "The impact of exchange rate movements on multi-product firms' export performance: Evidence from China," China Economic Review, Elsevier, vol. 39(C), pages 46-62.
    45. Boehm, Johannes & Dhingra, Swati & Morrow, John, 2016. "Swimming upstream: input-output linkages and thedirection of product adoption," LSE Research Online Documents on Economics 66418, London School of Economics and Political Science, LSE Library.
    46. repec:hal:spmain:info:hdl:2441/6g0gsihsjmn5snc9pb0jo6hhp is not listed on IDEAS
    47. repec:hal:cesptp:hal-01870888 is not listed on IDEAS
    48. repec:hal:pseose:hal-00975562 is not listed on IDEAS
    49. Andrew B. Bernard & Ilke Van Beveren & Hylke Vandenbussche, 2014. "Multi-Product Exporters and the Margins of Trade," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 142-157, June.
    50. Lu, Yi & Tao, Zhigang & Zhang, Yan, 2018. "How do exporters adjust export product scope and product mix to react to antidumping?," China Economic Review, Elsevier, vol. 51(C), pages 20-41.
    51. Lopresti, John, 2016. "Multiproduct firms and product scope adjustment in trade," Journal of International Economics, Elsevier, vol. 100(C), pages 160-173.
    52. Runjuan Liu, 2010. "Import competition and firm refocusing," Canadian Journal of Economics, Canadian Economics Association, vol. 43(2), pages 440-466, May.
    53. Hartmut Egger & Michael Koch, 2012. "Labour unions and multi‐product firms in closed and open economies," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1456-1479, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arnarson, Björn Thor, 2020. "The superstar and the followers: Intra-firm product complementarity in international trade," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 277-304.
    2. Luca Macedoni & Rui Zhang & Frederic Warzynski, 2024. "Fight or Flight? How Do Firms Adapt Their Product Mix in Response to Demand and Competition," CESifo Working Paper Series 11144, CESifo.
    3. Macedoni, Luca, 2022. "Large multiproduct exporters across rich and poor countries: Theory and evidence," Journal of Development Economics, Elsevier, vol. 156(C).
    4. Lisandra Flach & Michael Irlacher, 2018. "Product versus Process: Innovation Strategies of Multiproduct Firms," American Economic Journal: Microeconomics, American Economic Association, vol. 10(1), pages 236-277, February.
    5. Chakraborty, Pavel & Henry, Michael, 2019. "Chinese competition and product variety of Indian firms," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 367-395.
    6. Daniel Baumgarten & Michael Irlacher & Karin Mayr‐Dorn, 2022. "Internationalization strategies of multi‐product firms: The role of technology," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(4), pages 1929-1965, November.
    7. Johannes Boehm & Swati Dhingra & John Morrow, 2022. "The Comparative Advantage of Firms," Journal of Political Economy, University of Chicago Press, vol. 130(12), pages 3025-3100.
    8. Lopresti, John, 2016. "Multiproduct firms and product scope adjustment in trade," Journal of International Economics, Elsevier, vol. 100(C), pages 160-173.
    9. R. Monin & M. Suarez Castillo, 2020. "Product switching, market power and distance to core competency," Documents de Travail de l'Insee - INSEE Working Papers g2020-06, Institut National de la Statistique et des Etudes Economiques.
    10. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 1-54, Elsevier.
    11. Flach, Lisandra & Irlacher, Michael & Unger, Florian, 2021. "Corporate taxes and multi-product exporters: Theory and evidence from trade dynamics," Journal of International Economics, Elsevier, vol. 132(C).
    12. Chan, Jackie M.L. & Irlacher, Michael & Koch, Michael, 2022. "Multiproduct Mergers and the Product Mix in Domestic and Foreign Markets," VfS Annual Conference 2022 (Basel): Big Data in Economics 264022, Verein für Socialpolitik / German Economic Association.
    13. Xinghua Deng & Ran Jing & Zheng Liang, 2020. "Trade liberalisation and domestic brands: Evidence from China's accession to the WTO," The World Economy, Wiley Blackwell, vol. 43(8), pages 2237-2262, August.
    14. Parenti, Mathieu, 2018. "Large and small firms in a global market: David vs. Goliath," Journal of International Economics, Elsevier, vol. 110(C), pages 103-118.
    15. Forslid, Rikard & Okubo, Toshihiro, 2023. "Trade, location, and multi-product firms," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    16. Larry Qiu & Miaojie Yu, 2014. "Multiproduct Firms, Export Product Scope, and Trade Liberalization: The Role of Managerial Efficiency," Working Papers 022014, Hong Kong Institute for Monetary Research.
    17. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    18. Ming Xu & Tenglong Zhong & Qian Xie & Hongkui Liu, 2022. "Foreign Demand, Competition Strategy, and Export Markups: Evidence from Chinese Multi‐Product Exporters," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(3), pages 187-209, May.
    19. Manova, Kalina & Yu, Zhihong, 2017. "Multi-product firms and product quality," Journal of International Economics, Elsevier, vol. 109(C), pages 116-137.
    20. repec:spo:wpmain:info:hdl:2441/1dn2prktaq9p3949il1h9ds86b is not listed on IDEAS
    21. Flach, Lisandra & Irlacher, Michael, 2014. "Product versus Process," Discussion Papers in Economics 21022, University of Munich, Department of Economics.

    More about this item

    Keywords

    Survey; Multi-product firms; International Economics; Theory; Empirics;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jku:econwp:2022-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: René Böheim (email available below). General contact details of provider: https://edirc.repec.org/data/vlinzat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.