The Superstar and the Followers : Intra-Firm Product Complementarity in International Trade
(2016) In Working Papers, Department of Economics 2016(25).- Abstract
- This paper investigates whether the exports of different products by the same firm are systematically interconnected. Using Swedish firm-registry data from 1997-2011, I first document that the distribution of firm export sales is skewed towards their best performing products (‘superstars’). I then use a novel instrumental variable approach to identify if the ‘superstar’ products induce more trade of non-superstar products. I find evidence that the exports of low-ranked (non-star) products of a firm complement the exports of a single superstar product to each destination. Extending the ‘superstar’ concept to a ‘superstar core’ of products strengthens this result (this includes the top decile of products in terms of export value). The... (More)
- This paper investigates whether the exports of different products by the same firm are systematically interconnected. Using Swedish firm-registry data from 1997-2011, I first document that the distribution of firm export sales is skewed towards their best performing products (‘superstars’). I then use a novel instrumental variable approach to identify if the ‘superstar’ products induce more trade of non-superstar products. I find evidence that the exports of low-ranked (non-star) products of a firm complement the exports of a single superstar product to each destination. Extending the ‘superstar’ concept to a ‘superstar core’ of products strengthens this result (this includes the top decile of products in terms of export value). The results show that a 1% increase in the exports of the superstar product and the superstar core increases the exports of non-star products by 0.13% and 0.376%. Hence, I find that the exports of non-star products complements the superstar while conversely, the same complementarity is not found using low-ranked products as placebo-superstars. The main contribution of this paper is identifying a new, sizeable and systematic intra-firm-destination one-way complementarity between products that is missing in the current models of multi-product exporters. (Less)
- Abstract (Swedish)
- This paper investigates whether the exports of different products by the same firm are systematically interconnected. Using Swedish firm-registry data from 1997-2011, I first document that the distribution of firm export sales is skewed towards their best performing products (‘superstars’). I then use a novel instrumental variable approach to identify if the ‘superstar’ products induce more trade of non-superstar products. I find evidence that the exports of low-ranked (non-star) products of a firm complement the exports of a single superstar product to each destination. Extending the ‘superstar’ concept to a ‘superstar core’ of products strengthens this result (this includes the top decile of products in terms of export value). The... (More)
- This paper investigates whether the exports of different products by the same firm are systematically interconnected. Using Swedish firm-registry data from 1997-2011, I first document that the distribution of firm export sales is skewed towards their best performing products (‘superstars’). I then use a novel instrumental variable approach to identify if the ‘superstar’ products induce more trade of non-superstar products. I find evidence that the exports of low-ranked (non-star) products of a firm complement the exports of a single superstar product to each destination. Extending the ‘superstar’ concept to a ‘superstar core’ of products strengthens this result (this includes the top decile of products in terms of export value). The results show that a 1% increase in the exports of the superstar product and the superstar core increases the exports of non-star products by 0.13% and 0.376%. Hence, I find that the exports of non-star products complements the superstar while conversely, the same complementarity is not found using low-ranked products as placebo-superstars. The main contribution of this paper is identifying a new, sizeable and systematic intra-firm-destination one-way complementarity between products that is missing in the current models of multi-product exporters. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/73a1a981-ac77-422f-a0a3-441a7e332d5e
- author
- Arnarson, Björn Thor LU
- organization
- publishing date
- 2016-10-11
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- Multi-product firms, product complementarity, spillovers, intra-firm spillover, international trade, inter-product spillover, multi-product firms, product complementarity, spillovers, intra-firm spillover, international trade, inter-product spillover
- in
- Working Papers, Department of Economics
- volume
- 2016
- issue
- 25
- pages
- 39 pages
- publisher
- Department of Economics, Lund University
- language
- English
- LU publication?
- yes
- id
- 73a1a981-ac77-422f-a0a3-441a7e332d5e
- date added to LUP
- 2016-11-16 10:16:44
- date last changed
- 2024-09-05 20:57:43
@misc{73a1a981-ac77-422f-a0a3-441a7e332d5e, abstract = {{This paper investigates whether the exports of different products by the same firm are systematically interconnected. Using Swedish firm-registry data from 1997-2011, I first document that the distribution of firm export sales is skewed towards their best performing products (‘superstars’). I then use a novel instrumental variable approach to identify if the ‘superstar’ products induce more trade of non-superstar products. I find evidence that the exports of low-ranked (non-star) products of a firm complement the exports of a single superstar product to each destination. Extending the ‘superstar’ concept to a ‘superstar core’ of products strengthens this result (this includes the top decile of products in terms of export value). The results show that a 1% increase in the exports of the superstar product and the superstar core increases the exports of non-star products by 0.13% and 0.376%. Hence, I find that the exports of non-star products complements the superstar while conversely, the same complementarity is not found using low-ranked products as placebo-superstars. The main contribution of this paper is identifying a new, sizeable and systematic intra-firm-destination one-way complementarity between products that is missing in the current models of multi-product exporters.}}, author = {{Arnarson, Björn Thor}}, keywords = {{Multi-product firms; product complementarity; spillovers; intra-firm spillover; international trade; inter-product spillover; multi-product firms; product complementarity; spillovers; intra-firm spillover; international trade; inter-product spillover}}, language = {{eng}}, month = {{10}}, note = {{Working Paper}}, number = {{25}}, publisher = {{Department of Economics, Lund University}}, series = {{Working Papers, Department of Economics}}, title = {{The Superstar and the Followers : Intra-Firm Product Complementarity in International Trade}}, url = {{https://lup.lub.lu.se/search/files/194594225/WP16_25.pdf}}, volume = {{2016}}, year = {{2016}}, }