We introduce asymmetric product differentiation in a model characterized by a linear demand system, endogenous markups and heterogeneous firms (as in Melitz-Ottaviano, 2008). In particular, a single industry is divided into a number of market segments, each characterized by a different degree of horizontal product differentiation. Such a setup allows us to explain, within a single theoretical framework, the non-linear relations between firm productivity, size and exporting behavior that have been documented by the empirical literature. The theoretical results are tested empirically by examining the performance of French wine producers operating in market segments characterized by different levels of horizontal product differentiation. Such segments are identified using the official classification of French wines based upon the controlled denomination of origin, i.e. the "Appellation d'Origine Contrôlée" (AOC) system.

Heterogeneous firms and asymmetric product differentiation

ALTOMONTE, CARLO;COLANTONE, ITALO;
2016

Abstract

We introduce asymmetric product differentiation in a model characterized by a linear demand system, endogenous markups and heterogeneous firms (as in Melitz-Ottaviano, 2008). In particular, a single industry is divided into a number of market segments, each characterized by a different degree of horizontal product differentiation. Such a setup allows us to explain, within a single theoretical framework, the non-linear relations between firm productivity, size and exporting behavior that have been documented by the empirical literature. The theoretical results are tested empirically by examining the performance of French wine producers operating in market segments characterized by different levels of horizontal product differentiation. Such segments are identified using the official classification of French wines based upon the controlled denomination of origin, i.e. the "Appellation d'Origine Contrôlée" (AOC) system.
2016
2016
Altomonte, Carlo; Colantone, Italo; Pennings, Enrico
File in questo prodotto:
File Dimensione Formato  
Colantone.pdf

non disponibili

Tipologia: Documento in Pre-print (Pre-print document)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 284.5 kB
Formato Adobe PDF
284.5 kB Adobe PDF   Visualizza/Apri
MailColantone.pdf

non disponibili

Tipologia: Altro materiale allegato
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 422.3 kB
Formato Adobe PDF
422.3 kB Adobe PDF   Visualizza/Apri
joie.12105.pdf

non disponibili

Descrizione: articolo
Tipologia: Pdf editoriale (Publisher's layout)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 267.49 kB
Formato Adobe PDF
267.49 kB Adobe PDF   Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3985519
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 7
  • ???jsp.display-item.citation.isi??? 5
social impact