DP6871 Domestic Rivalry and Export Performance: Theory and Evidence from International Airline Markets
|Author(s):||Joseph A. Clougherty, Anming Zhang|
|Publication Date:||June 2008|
|Keyword(s):||airlines, exports, national champion, rivalry hypothesis|
|JEL(s):||L40, L52, L93|
|Programme Areas:||Industrial Organization, International Trade and Regional Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6871|
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.