SMU SOE Seminar Series (February 27, 2026): Superstar Products by Superstar Exporters

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ABSTRACT

We show empirically that it is a firm’s superstar products, rather than its product scope or average product appeal, that make it a superstar exporter. These superstar products account for more than half of aggregate sectoral exports. We build a multiproduct firm model with endogenous firm-level investment that shapes the distribution of product appeal. Higher-ability firms invest more as they benefit more from such investments, and are therefore more likely to generate superstar products. The endogenous firm-level investment lead to heterogeneous aggregate bilateral trade elasticities and new sources of welfare changes in response to trade shocks.