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Effect of international activity on firm performance

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  • Joachim Wagner

    (Leuphana University, Lüneburg, and IZA, Germany)

Abstract

There is evidence that better performing firms tend to enter international markets. Internationally active firms are larger, more productive, and pay higher wages than other firms in the same industry. Positive performance effects of engaging in international activity are found especially in firms from less advanced economies that interact with partners from more advanced economies. Lowering barriers to the international division of labor should therefore be part of any pro-growth policy.

Suggested Citation

  • Joachim Wagner, 2019. "Effect of international activity on firm performance," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-47, November.
    • Handle: RePEc:iza:izawol:journl:2019:n:47
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    References listed on IDEAS

    as
    1. Joachim Wagner, 2016. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 9, pages 311-338, World Scientific Publishing Co. Pte. Ltd..
    2. Joachim Wagner, 2016. "Exports and Productivity: A Survey of the Evidence from Firm Level Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 1, pages 3-41, World Scientific Publishing Co. Pte. Ltd..
    3. David Greenaway & Richard Upward & Peter Wright (ed.), 2008. "Globalisation and Labour Market Adjustment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-58238-5.
    4. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2012. "The Empirics of Firm Heterogeneity and International Trade," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 283-313, July.
    5. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.
    6. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2016. "Do Exporters Really Pay Higher Wages? First Evidence from German Linked Employer–Employee Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 5, pages 177-213, World Scientific Publishing Co. Pte. Ltd..
    7. Hijzen, Alexander & Martins, Pedro S. & Schank, Thorsten & Upward, Richard, 2013. "Foreign-owned firms around the world: A comparative analysis of wages and employment at the micro-level," European Economic Review, Elsevier, vol. 60(C), pages 170-188.
    8. Joachim Wagner & John Philipp Weche Gelübcke, 2012. "Foreign Ownership and Firm Survival: First Evidence for Enterprises in Germany," International Economics, CEPII research center, issue 132, pages 117-139.
    9. Helpman, Elhanan, 2011. "Understanding Global Trade," Economics Books, Harvard University Press, number 9780674060784, Spring.
    10. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2016. "Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from Linked Employer–Employee Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 6, pages 215-241, World Scientific Publishing Co. Pte. Ltd..
    11. Robert C. Feenstra, 2010. "Offshoring in the Global Economy: Microeconomic Structure and Macroeconomic Implications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262013835, December.
    12. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2008. "Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data," Working Paper Series in Economics 74, University of Lüneburg, Institute of Economics.
    13. Joachim Wagner, 2011. "Productivity and International Firm Activities: What do we know?," Working Paper Series in Economics 194, University of Lüneburg, Institute of Economics.
    14. Joachim Wagner, 2016. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 2, pages 43-87, World Scientific Publishing Co. Pte. Ltd..
    15. Wagner Joachim, 2019. "Does It Pay to Be Active on Many Foreign Markets? Profitability in German Multi-Market Exporters and Importers from Manufacturing Industries," Review of Economics, De Gruyter, vol. 70(1), pages 1-13, April.
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    Cited by:

    1. Surabhi Somya & Madhuri Saripalle, 2023. "The Determinants of Firm’s Growth in the Telecommunication Services Industry: Empirical Evidence from India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(1), pages 193-211, March.
    2. Lawless, Martina & Kren, Janez, 2023. "Structure of international goods trade for Ireland and Northern Ireland," Research Series, Economic and Social Research Institute (ESRI), number SUSTAT117, June.

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    More about this item

    Keywords

    firms; trade; offshoring; productivity; employment; wages; survival;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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