Discussion paper
DP18683 Co-Exportation of Products by Multi-Product Firms
The attention on multi-product firms to date has mainly focused on firm scope, rather than what firms produce. We study what firms produce by developing a heterogeneous firm model accounting for correlations in production efficiencies across products and correlations in consumers' tastes across products and destinations. Our estimation strategy centers on a novel extension of generalized score matching. We fit the model to Chinese exports data, focusing on firms exporting products with ISIC codes C19 (leather, leather products, and footwear) and C18 (wearing apparel, dressing and dyeing of fur). We document clustered co-production structures consistent with correlated efficiencies across products.
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