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Trade and the size distribution of firms: Evidence from the German Empire

Author

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  • Biermann Marcus

    (IRES/LIDAM, UCLouvain, Louvain-la-Neuve, Belgium)

Abstract

What effect did trade have on the size distribution of firms during the first wave of globalization? Three historical datasets from the German Empire between 1875 and 1907 were collected and harmonized to answer this question. This paper combines industry census and bilateral railway trade data from the same industry and region along with industry-level tariff data. The evidence shows that increases in aggregate trade caused the share of firms to shift from smaller to larger firms. Exogenous decreases in tariffs caused an increase in the share of the largest firms. The regional distributive effects of trade on inequality between firms that are discussed in the contemporaneous literature were already present during the first wave globalization.

Suggested Citation

  • Biermann Marcus, 2021. "Trade and the size distribution of firms: Evidence from the German Empire," German Economic Review, De Gruyter, vol. 22(3), pages 289-322, August.
    • Handle: RePEc:bpj:germec:v:22:y:2021:i:3:p:289-322:n:4
    DOI: 10.1515/ger-2020-0048
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    More about this item

    Keywords

    Firm heterogeneity; firm size distribution; German Empire; Globalization;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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