The superstar and the followers: Intra-firm product complementarity in international trade

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Standard

The superstar and the followers: Intra-firm product complementarity in international trade. / Arnarson, Björn Thor.

I: Journal of Economic Behavior & Organization, Bind 117, 09.2020, s. 277-304.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningfagfællebedømt

Harvard

Arnarson, BT 2020, 'The superstar and the followers: Intra-firm product complementarity in international trade', Journal of Economic Behavior & Organization, bind 117, s. 277-304. https://doi.org/10.1016/j.jebo.2020.06.013

APA

Arnarson, B. T. (2020). The superstar and the followers: Intra-firm product complementarity in international trade. Journal of Economic Behavior & Organization, 117, 277-304. https://doi.org/10.1016/j.jebo.2020.06.013

Vancouver

Arnarson BT. The superstar and the followers: Intra-firm product complementarity in international trade. Journal of Economic Behavior & Organization. 2020 sep;117:277-304. https://doi.org/10.1016/j.jebo.2020.06.013

Author

Arnarson, Björn Thor. / The superstar and the followers: Intra-firm product complementarity in international trade. I: Journal of Economic Behavior & Organization. 2020 ; Bind 117. s. 277-304.

Bibtex

@article{04073c417b4c4d519ec9ef2076f58c63,
title = "The superstar and the followers: Intra-firm product complementarity in international trade",
abstract = "Export sales of multi-product firms are known to be skewed towards their best performing core products. Less is known about the large number of products outside the core that still account for a considerable share of the export value. I use high-quality Swedish firm-registry data to investigate if the exports of core and non-core products are systematically interconnected. Using a novel instrumental variable approach, I find evidence that the exports of non-core products respond to trade of the core. Conversely, the same complementarity is not found using non-core products as placebo-cores. Decomposing the response, I find that over a quarter of the effect can be attributed to price changes of non-core products, suggestive of demand-side explanations. The main contribution of this paper is identifying a new, sizeable, and systematic within-firm one-way complementarity between products that can explain non-core product trade flows. Ignoring this pattern of cross-product dependence may lead to an under-emphasis on the core and over-emphasis on individual trade flows as products should not be viewed in isolation, since the ‘superstar’ core has (contemporaneous) followers.",
keywords = "Faculty of Social Sciences, Multi-product firms, Product complementarity, Intra-firm product dependence, Within-destination export variation, Product demand, Product synergies",
author = "Arnarson, {Bj{\"o}rn Thor}",
year = "2020",
month = "9",
doi = "10.1016/j.jebo.2020.06.013",
language = "English",
volume = "117",
pages = "277--304",
journal = "Journal of Economic Behavior & Organization",
issn = "0167-2681",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - The superstar and the followers: Intra-firm product complementarity in international trade

AU - Arnarson, Björn Thor

PY - 2020/9

Y1 - 2020/9

N2 - Export sales of multi-product firms are known to be skewed towards their best performing core products. Less is known about the large number of products outside the core that still account for a considerable share of the export value. I use high-quality Swedish firm-registry data to investigate if the exports of core and non-core products are systematically interconnected. Using a novel instrumental variable approach, I find evidence that the exports of non-core products respond to trade of the core. Conversely, the same complementarity is not found using non-core products as placebo-cores. Decomposing the response, I find that over a quarter of the effect can be attributed to price changes of non-core products, suggestive of demand-side explanations. The main contribution of this paper is identifying a new, sizeable, and systematic within-firm one-way complementarity between products that can explain non-core product trade flows. Ignoring this pattern of cross-product dependence may lead to an under-emphasis on the core and over-emphasis on individual trade flows as products should not be viewed in isolation, since the ‘superstar’ core has (contemporaneous) followers.

AB - Export sales of multi-product firms are known to be skewed towards their best performing core products. Less is known about the large number of products outside the core that still account for a considerable share of the export value. I use high-quality Swedish firm-registry data to investigate if the exports of core and non-core products are systematically interconnected. Using a novel instrumental variable approach, I find evidence that the exports of non-core products respond to trade of the core. Conversely, the same complementarity is not found using non-core products as placebo-cores. Decomposing the response, I find that over a quarter of the effect can be attributed to price changes of non-core products, suggestive of demand-side explanations. The main contribution of this paper is identifying a new, sizeable, and systematic within-firm one-way complementarity between products that can explain non-core product trade flows. Ignoring this pattern of cross-product dependence may lead to an under-emphasis on the core and over-emphasis on individual trade flows as products should not be viewed in isolation, since the ‘superstar’ core has (contemporaneous) followers.

KW - Faculty of Social Sciences

KW - Multi-product firms

KW - Product complementarity

KW - Intra-firm product dependence

KW - Within-destination export variation

KW - Product demand

KW - Product synergies

U2 - 10.1016/j.jebo.2020.06.013

DO - 10.1016/j.jebo.2020.06.013

M3 - Journal article

VL - 117

SP - 277

EP - 304

JO - Journal of Economic Behavior & Organization

JF - Journal of Economic Behavior & Organization

SN - 0167-2681

ER -

ID: 246671215