Files

Abstract

We analyze how a change in agricultural input price impacts the selection process and market shares in foreign markets for firms in the final agrifood good sector. To do so we develop a model with heterogeneous firms and intermediate good where input use is technologically constrained. We show that the effect of input price depends on labor productivity and fixed costs. Moreover, we show that a decrease in input price in all countries can decrease the probability to enter foreign markets, through export or horizontal foreign direct investment (HFDI). Finally, we show that the decrease of the intermediate good price always increases the share of HFDI relative to export, even if it can modify the HFDI-Export trade-off in favor of HFDI or export.

Details

PDF

Statistics

from
to
Export
Download Full History