@TechReport{CEPII:2016-17,
author={Thierry Mayer and Marc Melitz and Gianmarco Ottaviano},
title={Product Mix and Firm Productivity Responses to Trade Competition},
year=2016,
month=July,
institution={CEPII},
type={Working Papers},
url={https://www.cepii.fr/CEPII/fr/publications/wp/abstract.asp?NoDoc=9284},
number={2016-17},
abstract={We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. 
In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multi-product firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets-and the induced product mix reallocations-induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial-and explain an important share of aggregate productivity fluctuations for French manufacturing.},
keywords={Multiproduct Firms ; Productivity ; Trade}
}