Export Variety and Country Productivity : Estimating the Monopolistic Competition Model with Endogenous Productivity
This paper provides evidence on the monopolistic competition model with heterogeneous firms and endogenous productivity. We show that this model has a well-defined GDP function where relative export variety enters positively, and estimate this function over 48 countries from 1980 to 2000. Average export variety to the United States increases by 3.3% per year, so it nearly doubles over these two decades. The total increase in export variety is associated with a 3.3% average productivity improvement for exporters over the two decades. Overall, the model can explain 31% of the within-country variation in productivity (or 52% for the OECD countries), but only a very small fraction of the between-country variation in productivity.
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| Main Authors: | , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2008
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| Subjects: | Models of Trade with Imperfect Competition and Scale Economies F120, Country and Industry Studies of Trade F140, |
| Online Access: | http://hdl.handle.net/10986/5721 |
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