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 usual 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.
Antoine Berthou and Lionel Fontagné
Classification JEL : F12, F15
Keywords : International trade, firm heterogeneity, multi-product exporters, trade elasticity
Updated on: 06/12/2018 11:08