Investigations of the effect of quality differences on heterogeneous performance in exporting have been limited by lack of direct measures of quality. We examine exports of French wine, matching the exporting firms to producer ratings from two wine guidebooks. We show that high quality producers export to more markets, charge higher prices, and sell more in each market. Our model predicts quality sorting: the more difficult a market is to serve, the better on average will be the firms that serve it. Our findings point to the empirical importance of quality sorting in one industry and could be extended to other industries. * PRELIMINARY AND INCOMPLETE. We thank Isaac Holloway for research assistance and Andy Bernard for very helpful suggestions.

This paper studies the determinants of location choice by foreign investors in France using a sample of almost 4000 foreign investments over 10 years and 92 locations. Concerning agglomeration effects, we find very strong evidence of positive spillovers between firms, and identify detailed patterns of clustering, assessing, for instance, the countries of origin and the industries for which those spillovers are the most substantial. Concerning regional policies, we find very little evidence of any positive impact. Finally, we identify a 'learning process' of FDI, the location decisions becoming more remote from the country of origin during the period we study. D

The servitization of the manufacturing sector refers to the evolution of manufacturers' capabilities to offer services as complements to or substitutes for the goods that they produce. A vast literature has described these strategies and has shown that this phenomenon is widespread and growing in most developed economies. However, very little systematic evidence of the extent or consequences of servitization based on a comprehensive data set of firms exists. In this paper, we provide such evidence using exhaustive data for French manufacturing firms between 1997 and 2007. We find that the vast majority of French manufacturers sell services in addition to producing goods. The shift toward services is growing steadily but at a slow pace. We also estimate the impact of servitization on firm performance. Controlling for various sources of endogeneity bias, our most conservative results show that firms that start selling services increase their profitability by 0.4%, their employment by 2.1%, and their total sales by 0.6%. For small businesses, we also find a positive impact on the production of goods. We also uncover strong heterogeneity across manufacturing industries.