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Publication

Carry-along trade

Journal Contribution - Journal Article

© The Author(s) 2018. Published by Oxford University Press on behalf of The Review of Economic Studies Limited. Large multi-product firms dominate international trade flows. Using novel linked production and export data at the firm-product level, we find that the overwhelming majority of manufacturing firms export products that they do not produce. Three quarters of the exported products and 30% of export value from Belgian manufacturers are in goods that are not produced by the firm, so-called Carry-Along Trade (CAT). The number of CAT products is strongly increasing in firm productivity while the number of produced products that are exported is weakly increasing in firm productivity. We propose a general model of production and sourcing at multi-product firms and explore new demand- and supply-side modelling features capable of generating predictions consistent with the empirical findings. Export price data and company interviews offer suggestive evidence for the presence of demand-scope complementarities.
Journal: The Review of Economic Studies
ISSN: 0034-6527
Issue: 2
Volume: 2018
Pages: 1 - 38
Publication year:2018
BOF-keylabel:yes
IOF-keylabel:yes
BOF-publication weight:6
CSS-citation score:2
Authors:International
Authors from:Higher Education
Accessibility:Open