[STBI-27-08-2015] Home Market Effect with Heterogeneous Firms

by Dr. Nguyễn Mạnh Hà

11:00 am, Thursday, 27-8-2015
Hall H.001, UEH School of Economics

Tóm tắt nghiên cứu | Abstract

“Using the framework of heterogeneous firms, the paper studies the role of intra-industry firm heterogeneity on the home-market effect. The paper finds that the magnitude of the home-market effect of an industry depends positively on the ratio of export to domestic sales of that industry and this sales ratio is determined by the industry characteristics. The role of firm heterogeneity on the home-market effect is first determined by the impact of the productivity dispersion, one of the industry characteristics, on the home-market effect. The paper finds that industries which have higher productivity dispersions (higher firm heterogeneity) have stronger home-market effects. More importantly, the paper finds that the sales ratio in the heterogeneous firm model relates positively to the fraction of exporting firms (the extensive-margin ratio) rather than the ratio of export to domestic sales per firm (the intensive-margin ratio) as in the homogeneous firm model, so the home-market effect depends positively on the fraction of exporting firms. This result further highlights the role of firm heterogeneity on the home-market effect. These predictions of the theoretical model are supported by the empirical analysis.

[Download the full paper here]

Người trình bày | Presenter

Dr. Ha Manh Nguyen is currently working at UEH School of Mathematics and Statistics. Ha’s studies focus on international trade and economics, and industrial organization. Ha graduated his PhD in economics at University of Colorado at Boulder in 2011, and had involved in the post-doc research fellow program at University of Luxembourg between 2011 and 2014. In this STBI seminar, Ha will present his research results in the topic of home market effect in heterogeneous firms.