2014/26 LEM Working Paper Series

Fickle product mix: exporters adapting their product vectors across markets

Lionel Fontagné, Angelo Secchi and Chiara Tomasi
multi-product, multi-country firms, product vectors, demand and concentration

  JEL Classifications
F14, L11, L22

This paper analyzes how multi-product firms adjust their exported product-mix across desti- nations. Using cross sections of Italian and French data, we show that firms do not follow a rigid ordering in their product mix exported in different markets but rather they adapt their choices to better match with country characteristics. By using metrics based on export shares and on sequences of product names we provide new insights on the extent a firm’s products portfolio changes across destinations that go beyond simple rank correlations. Demand asymmetries, mar- ket structure heterogeneity and differential abilities to match unit values of products supplied by competitors emerge as three significant factors in explaining the variety-country variability observed in firms’ export patterns. Our results resist when we control for a firm’s choice of not exporting an available product to a given destination, an explicit choice likely to contain relevant information.
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