Carry-Along Trade.

Abstract

New empirical and theoretical work has highlighted the importance of multi-product fi…rms in international trade flows. We examine multi-product exporters in the small open economy of Belgium. Linking production and export data at the fi…rm-product level, we discover new and, heretofore, unknown facts about multi-product manufacturing exporters. The large majority of Belgian manufacturing …firms export products that they do not produce. More than three quarters of the exported products and more than one quarter of export value from Belgian manufacturers are in goods that are not produced by the …rm, so-called Carry-Along Trade (CAT). CAT exports are concentrated in the largest and most productive …rms and CAT exports respond di¤erently to variation in …rm productivity and size than do exports of goods that the …rm produces.