Foreign market conditions and export performance: does ‘crowdedness’ reduce exports? |
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Authors: | Holger Breinlich Alessandra Tucci |
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Institution: | 1. Department of Economics, University of Mannheim;2. Directorate General for Economic and Financial Affairs, European Commission |
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Abstract: | Abstract This paper analyzes the link between firm exports and the competitive environment in foreign markets. We derive a theory‐based econometric specification linking market‐specific exports to foreign demand and the degree of a market’s ‘crowdedness,’ which depends on the number and efficiency of firms competing there and the barriers impeding their access. Estimates on a large sample of Italian firms indicate that increased crowdedness has reduced Italian exports, but only by 0.2%–0.3% per year. This is substantially less than the contribution of other factors such as higher unit labour costs or weak demand growth in the EU15. |
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Keywords: | F12 F15 |
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