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Séminaire Job Market BSE
Marco Duenas
Senior Researcher at Climafin, Paris, France
Being at the core: firm product specialisation
Abstract:
We propose a novel measure to investigate firms’ product specialisation at the firm-product level: \textit{product coreness}, that captures the centrality of exported products within the firm’s export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, coreness is positively related to export volumes, which also holds when decomposing it into products’ export share and their proximity to the rest of the firm’s export basket. Second, this latter component is particularly relevant for products that do not account for the largest share of firms’ exports. Third, such firm-level patterns also have implications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level. Therefore, the paper shows that how closely a product fits within a firm’s capabilities is important for economic performance at the firm and country levels. We explore these issues both with descriptive evidence exploring the key features of coreness and its relationship with other measures put forward in the literature and within an econometric framework exploring the relationship between coreness and trade volumes.
We propose a novel measure to investigate firms’ product specialisation at the firm-product level: \textit{product coreness}, that captures the centrality of exported products within the firm’s export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, coreness is positively related to export volumes, which also holds when decomposing it into products’ export share and their proximity to the rest of the firm’s export basket. Second, this latter component is particularly relevant for products that do not account for the largest share of firms’ exports. Third, such firm-level patterns also have implications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level. Therefore, the paper shows that how closely a product fits within a firm’s capabilities is important for economic performance at the firm and country levels. We explore these issues both with descriptive evidence exploring the key features of coreness and its relationship with other measures put forward in the literature and within an econometric framework exploring the relationship between coreness and trade volumes.