Why do similar firms export differently?. Issue 4 (December 2022)

• Record Type: Journal Article
• Authors: Boitier, Vincent
• Is Part Of: Research in economics. Volume 76:Issue 4(2022)
• Page Start: 373
• Page End: 385
• Publication Date: 2022-12
• Subjects: Firms' location -- Attractiveness -- Competition -- Dispersion in strategies -- Potential function; R10 -- F10 -- C72; Economics -- Periodicals; Économie politique -- Périodiques; 330.05
• DOI: 10.1016/j.rie.2022.09.002
• Languages: English
• ISSNs: 1090-9443

Abstract

Abstract: Eaton et al. (2011) underline that firms with similar production costs, entry costs and demand export to different countries. In this theoretical article, I provide a rationale for this feature of the data. I demonstrate that similar firms exporting differently can be explained by a baseline trade-off between attractiveness and competition that is present in any model with monopolistic competition. I then show that this trade-off also generates valuable theoretical features including distance-related mark-ups, third country effect and equivalence with random utility models.