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Small Open Economy Firms in International Trade: Evidence from Danish Transactions-Level Data

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Author Info

  • Eriksson, Tor

    ()
    (Department of Economics, Aarhus School of Business)

  • Smeets, Valerie

    ()
    (Department of Economics, Aarhus School of Business)

  • Warzynski, Frederic

    ()
    (Department of Economics, Aarhus School of Business)

Abstract

In this paper, we use a rich dataset disaggregating imports and exports decisions by product and origin/destination of all Danish companies for the period 1993-2003 to provide key elements in characterizing Danish firms in international trade. Most evidence to date emanates from the U.S. or developing economies like Columbia or Mexico. Benchmarking on these studies, we find some similarities but also differences which we think are representative of European-type, small open economies. We find that Danish exporters make up a fairly small fraction of the total of firms, but that this fraction is higher than in e.g., the U.S. Firms engaged in exporting have the same positive performance characteristics – size, capital and skilled labour intensity, labour as well as total factor productivity, and wages – found in also in previous studies. But most exporter premia are significantly larger in Denmark than in the U.S. There are few traces of the European Union’s Single Market Program and the adoption the Euro in 1998. We observe no impact of these changes on the number of exporters, but some signs of impacts on the number of products and export destination countries. Finally, we find that trade is positively related to productivity of firms. The association between productivity and the firm’s imports of intermediate goods is particularly strong.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 09-7.

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Length: 39 pages
Date of creation: 15 May 2009
Date of revision:
Handle: RePEc:hhs:aareco:2009_007

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research

Keywords: Exporters; exporter premium; firm heterogeneity;

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Cited by:
  1. Wagner, Joachim, 2011. "Exports, Imports and Firm Survival: First Evidence for Manufacturing Enterprises in Germany," IZA Discussion Papers 5924, Institute for the Study of Labor (IZA).
  2. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(2), pages 235-267, June.
  3. Marcel van den Berg, 2013. "Importing, productivity and SMEs: firm-level evidence from the Netherlands," Working Papers 13-07, Utrecht School of Economics.
  4. Smeets, Valérie & Warzynski, Frédèric, 2011. "Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade," Working Papers 11-13, University of Aarhus, Aarhus School of Business, Department of Economics.
  5. Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers 23, Institute for the Study of Labor (IZA).
  6. Ina Charlotte Jäkel, 2013. "Import-push or Export-pull? An Industry-level Analysis of the Impact of Trade on Firm Exit," Economics Working Papers 2013-20, School of Economics and Management, University of Aarhus.

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