Working Papers,
Lund University, Department of Economics

Abstract: In this paper I investigate the impact of a decrease in trade costs on firms’ decisions to export. The main contribution of this paper is to evaluate empirically the theoretical predictions of several models of multi-product exporters. The focus is on the firm export entry decision and the within firm adjustment regarding product scope and intensity. For identification I use a quasi-natural experiment, the introduction of the Öresund Bridge between southern Sweden and Denmark, to analyse the impact on firm behaviour. Using a difference-in-difference methodology, firms in the ‘treated’ municipality, Malmö, are compared to firms in more geographically distant Gothenburg and Stockholm (‘controls’). For the ‘treated’ manufacturing firms a theoretically consistent positive effect is found for firm entry into exporting, aggregate firm trade flow and the number of products exported. The models of multi-product exporters evaluated do not provide a clear theoretical prediction regarding the impact on average trade value per product. In this paper, however, I find that around 70-80% of the increase in aggregate firm trade value is due to increases in the average trade value per product (the product intensive margin), while only 20-30% is due to increases in the number of products exported (the product extensive margin).

Keywords: International Trade; Multi-Product Firms; Infrastructure; Market Access; Quasi-Natural Experiment; Trade Costs

JEL-codes: F10; F13; F14; F15

38 pages, First version: February 11, 2015. Revised: October 14, 2016.

Full text files

wp15_6.pdf  

Download statistics

• Lund University, Department of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Iker Arregui Alegria ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:lunewp:2015_006This page generated on 2024-09-13 22:16:10.