Does export complexity matter for firms' output volatility?

With this paper we provide, for the first time to our knowledge, micro-level evidence on the negative linkage between firm complexity and volatility. A higher sophistication level of a firm's export basket reduces its output fluctuations. When focusing on a sample of exporting and non exporting firms, the average complexity of the production mix equally affects stability of sales of both groups. The stabilising role of firms' production sophistication is driven by complex products' higher income elasticity, technological diversification and market entry barriers.