How do multi-product exporters react to a change in trade costs?. EFIGE Working paper

We use data on individual French exporters to document how a change in trade costs following the introduction of the euro affected firms ’ export margins in relation to export decisions, the number of products exported and average sales per product. Our results confirm two effects predicted by the theory: firms increase the range of products they export as well as their intensive margin. This effect is most evident in markets with moderate monetary policy co-ordination before 1999. General equilibrium competition effects reduce the initial positive impact on each of these margins. We find no evidence of firms ’ increased export participation. JEL classification: F12, F1