Preference for variety on behalf of consumers suggests that variety in supply is a pertinent characteristic of individual firms. This paper studies the relationship between export variety and exports on a cross-section of exporting firms in Sweden. Multi-product firms, i.e., firms which export a set of products, are motivated by economies of scope. It is maintained that such firms have advantages in export markets through the materialization of economies of scope. Extensive and intensive margins are computed by firm as well as by firm and market such that the respective contribution of each margin to estimated relationships is revealed. In a regression of the size of export sales on the number of export products, controlling for productivity, size and industry heterogeneity, the coefficient estimate is found to be significant and positive. Firms with larger export variety export more, of which 67% can be ascribed to a larger set of export markets (the extensive margin). It is also shown that the variety of firms’ market-specific export flows varies positively with market size and negatively with distance.

Models of international trade suggest a significant relationship between product variety and exports. Although such a relationship is confirmed in studies of the export performance of countries, firm-level analyses have not considered variety in supply as a characteristic pertinent for export performance. This paper maintains that multi-product firms, i.e., firms that supply a set of varieties, have advantages over single-product firms in export markets which partly stem from the materialization of economies of scope. Controlling for productivity, size and industry heterogeneity, it is shown that firms with higher export variety export more and that this is primarily due to a larger set of destination markets. This is consistent with multiproduct firms being able to recover larger entry costs and increase the geographical scope of their export activities through cost advantages. It is further shown that the variety of firms’ export flows is not uniform across markets but adjusts to characteristics of markets and links.

Applied Economics Journal, Market Determination Regimes, Mundell-Fleming Model, Liberalized Exchange Rate Management System, Dual Exchange Rate System, Basket Pegged System, Indian Economy, Historical Datasets, Policy Implications, Vector Error Correction Model, Granger Cause Variations, Bidirectional Granger Causality.