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Self-Selection into Export Markets by Business Services Firms: Evidence from France, Germany and the United Kingdom

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  • Temouri, Yama

    ()
    (Aston University)

  • Vogel, Alexander

    ()
    (Leuphana University Lüneburg)

  • Wagner, Joachim

    ()
    (Leuphana University Lüneburg)

Abstract

This study reports results from an empirical investigation of business services sector firms that (start to) export, comparing exporters to firms that serve the national market only. We estimate identically specified empirical models using comparable enterprise level data from France, Germany, and the United Kingdom. Exporters are more productive and pay higher wages on average in all three countries. Results for profitability differ across borders – profitability of exporters is significantly smaller in Germany, significantly larger in France, and does not differ significantly in the UK. The results for wages and productivity hold in the years before the export start, which indicates self-selection into exporting of more productive services firms that pay higher wages. The surprising finding of self-selection of less profitable German business services firms into exporting does not show up among firms from France and the UK where no statistically significant relationship between profitability and starting to export is found.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5147.

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Length: 34 pages
Date of creation: Aug 2010
Date of revision:
Publication status: published in: Structural Change and Economic Dynamics, 2013, 25 (2), 146-158
Handle: RePEc:iza:izadps:dp5147

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Keywords: business services firms; France; UK; exports; self-selection; Germany;

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References

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  1. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Wiley Blackwell, vol. 30(1), pages 60-82, 01.
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Citations

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Cited by:
  1. Markus Kelle & Jörn Kleinert & Horst Raff & Farid Toubal, 2013. "Cross-border and Foreign Affiliate Sales of Services: Evidence from German Microdata," The World Economy, Wiley Blackwell, vol. 36(11), pages 1373-1392, November.
  2. Wagner, Joachim, 2011. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," IZA Discussion Papers 5916, Institute for the Study of Labor (IZA).
  3. Biewen, Elena & Harsch, Daniela & Spies, Julia, 2012. "The determinants of service imports: The role of cost pressure and financial constraints," Discussion Papers 31/2012, Deutsche Bundesbank, Research Centre.
  4. Joachim Wagner, 2012. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," Open Economies Review, Springer, Springer, vol. 23(5), pages 747-765, November.
  5. Damijan, Jože & Haller, Stefanie A. & Kaitila, Ville & Maliranta, Mika & Milet, Emmanuel & Rojec, Matija & Mirza, Daniel, 2012. "The performance of trading firms in the services sectors – Comparable evidence from four EU countries," Discussion Papers, The Research Institute of the Finnish Economy 1284, The Research Institute of the Finnish Economy.
  6. Joachim Wagner, 2011. "From Estimation Results to Stylized Facts Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms," De Economist, Springer, Springer, vol. 159(4), pages 389-412, December.
  7. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
  8. Yvonne Wolfmayr & Elisabeth Christen & Michael Pfaffermayr, 2013. "Pattern, Determinants and Dynamics of Austrian Service Exports – A Firmlevel Analysis," FIW Research Reports series, FIW IV-005, FIW.
  9. Stefano Federico & Enrico Tosti, 2012. "Exporters and importers of services: firm-level evidence on Italy," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 877, Bank of Italy, Economic Research and International Relations Area.
  10. Alexander Vogel & Joachim Wagner, 2011. "Robust estimates of exporter productivity premia in German business services enterprises," Working Paper Series in Economics 207, University of Lüneburg, Institute of Economics.

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