Discussion paper

DP6871 Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets

The much-studied relationship between domestic rivalry and export performance consists of those supporting a national-champion rationale, and those supporting a rivalry rationale. While the empirical literature generally supports the positive effects of domestic rivalry, the national-champion rationale actually rests on firmer theoretical ground. We address this inconsistency by providing a theoretical framework that illustrates three paths via which domestic rivalry translates into enhanced international exports. Furthermore, empirical tests on the world airline industry elicit the existence of one particular path ? an enhanced firm performance effect ? that connects domestic rivalry with improved international exports.

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Citation

Clougherty, J and A Zhang (2008), ‘DP6871 Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets‘, CEPR Discussion Paper No. 6871. CEPR Press, Paris & London. https://cepr.org/publications/dp6871