Sizes of Firms, Exporting Behavior, and the Structure of French Industry

Abstract

THE lowering of tariffs among the European Community (EC) countries in the I96os provides a splendid laboratory experiment on the relation between international trade and industrial organization. It allows tests of many hypotheses about the effects on market structure and performance of the liberalization of trade, but also of the differential effects of liberalized trade (intra-EC) and trade subject to conventional import controls (between EC and the rest of the world). In this paper we examine one of these relations, that between the sizes of French firms and their exporting activity. This relation is observed at only one point in timeI 963-but fortuitously a point when intra-EEC tariff reductions were fully under way. For few countries has the relation between firm size and exports received much attention. Interesting by itself, it also illuminates other important relations between trade and industrial structure.