We analyze the impact of input tariffs on the export status and export performance of heterogeneous processing firms. Using a theoretical model with downstream firms exhibiting different levels of productivity, we show that lower input tariffs may increase the export sales of high-productivity firms at the expense of low-productivity firms and may decrease the probability of firms entering foreign markets. We compare the predictions of the theoretical model with firm-level data from the French agrifood sector by developing a two-stage estimation procedure that uses an equation for selection into export markets in the first stage and an export's equation in the second stage. The liberalization of agricultural trade appears to favor the reallocation of market share from low- to high-productivity agrifood firms. In addition, our results suggest that, whether lower input tariffs increase total export sales (and jobs), a large fraction of the least productive exporting firms may lose from an additional decrease in agricultural input tariffs

In this paper, we set up a simple model that explains the relation between low input price, high exit rates and industrial concentration. More precisely, we argue that falling input prices force firms with low productivity to exit and induce expansion of more efficient incumbents at the expense of less productive producers. Our model helps reconcile some well-established empirical results regarding the food processing industry. Indeed, agricultural prices have been declining between the early 1900s until 2006 while, over the same period, concentration and firm productivity have been increasing in the agri-food industry. RésuméNous analysons l'incidence de réductions dans les prix des intrants sur le taux de sortie d'entreprises et le niveau de concentration industrielle. Les bas prix profitent davantage aux entreprises très productives et forcent la sortie d'entreprises moins productives. Ce phénomène est observé dans l'industrie de la transformation agroalimentaire. D'importantes baisses de prix ont été observées pour les produits primaires entre le début des années 1900 jusqu'en 2006 tandis que des hausses dans la concentration industrielle et la productivité des firmes ont été signalées durant la même période dans l'industrie agroalimentaire.JEL classifcation: D24; L11; L25; L66