TY - CEPII
A1 - Lionel Fontagné
A1 - Antoine Berthou
TI - Variable Trade Costs, Composition Effects, and the Intensive Margin of Trade
IS - 2015-08
T3 - Working Papers
KW - international trade
KW - firm heterogeneity
KW - multi-product exporters
KW - trade elasticity
N2 - We estimate the elasticity of extra-EU French firm-level exports with respect to applied tariffs -- a variable trade cost. We propose a methodology controlling for unobserved firm characteristics driving selection in exports market and for the resistance terms. Results confirm a significant negative impact of tariffs on firm-level exports, with one fifth of this impact falling on the induced adjustment in the exporters' product mix. When controlling for this adjustment and focusing on the core exported products, the elasticity of the product-destination firm-level exports with respect to applied tariffs is estimated at about -2.5.
ER -