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Exports, imports and profitability: First evidence for manufacturing enterprises

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  • Joachim Wagner

    ()
    (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

This paper documents for the first time the relationship between profitability and three types of international trade activities – exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods, that merge information from surveys performed by the Statistical Offices and administrative data collected by the Tax Authorities. Descriptive statistics and regression analysis (with and without controlling for unobserved firm heterogeneity and the role of outliers) point to the absence of any statistically significant and economically large effects of trade activities on profits. This demonstrates that any productivity advantages of trading firms are eaten up by extra costs related to selling and buying on foreign markets.

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Bibliographic Info

Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 206.

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Length: 37 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:lue:wpaper:206

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Web page: http://leuphana.de/institute/ivwl.html

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Keywords: exports; imports; profitability;

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References

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  1. Wagner, Joachim, 2005. "Exports and Productivity : A survey of the evidence from firm level data," HWWA Discussion Papers 319, Hamburg Institute of International Economics (HWWA).
  2. Kox, Henk L.M. & Rojas Romasgosa, Hugo, 2010. "Exports and productivity selection effects for Dutch firms," MPRA Paper 24390, University Library of Munich, Germany.
  3. The International Study Group on Exports and Productivity, 2007. "Exports and Productivity - Comparable Evidence for 14 Countries," Working Papers Central Bank of Chile 437, Central Bank of Chile.
  4. Vito Amendolagine & Rosa Capolupo & Nadia Petragallo, 2010. "Export Status and Performance in a Panel of Italian Manufacturing Firms," series 0027, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2010.
  5. Temouri, Yama & Vogel, Alexander & Wagner, Joachim, 2013. "Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 146-158.
  6. Alexander Vogel & Joachim Wagner, 2010. "Higher productivity in importing German manufacturing firms: self-selection, learning from importing, or both?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(4), pages 641-665, January.
  7. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," IZA Discussion Papers 3798, Institute for the Study of Labor (IZA).
  8. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
  9. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages F134-F161, 02.
  10. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," NBER Working Papers 11555, National Bureau of Economic Research, Inc.
  11. Vincenzo Verardi & Joachim Wagner, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(4), pages 546-557, August.
  12. Maria Caterina Bramati & Christophe Croux, 2007. "Robust estimators for the fixed effects panel data model," Econometrics Journal, Royal Economic Society, vol. 10(3), pages 521-540, November.
  13. Alexander Vogel & Joachim Wagner, 2009. "Exports and Profitability – First Evidence for German Business Services Enterprises," Working Paper Series in Economics 129, University of Lüneburg, Institute of Economics.
  14. International Study Group on Exports and Productivity (ISGEP), 2008. "Understanding Cross-Country Differences in Exporter Premia: Comparable Evidence for 14 Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 596-635, December.
  15. Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2007. "Do exporters really pay higher wages? First evidence from German linked employer-employee data," Journal of International Economics, Elsevier, vol. 72(1), pages 52-74, May.
  16. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March.
  17. Alexander Vogel & Stefan Dittrich, 2008. "The German turnover tax statistics panel," Working Paper Series in Economics 92, University of Lüneburg, Institute of Economics.
  18. Marco Grazzi, 2009. "Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms," LEM Papers Series 2009/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  19. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
  20. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2010. "Higher wages in exporting firms: self-selection, export effect, or both? First evidence from linked employer-employee data," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(2), pages 303-322, June.
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Cited by:
  1. Vu, Van Huong, 2012. "Private manufacturing SMEs survival and growth in Vietnam: The role of export participation," MPRA Paper 42489, University Library of Munich, Germany.
  2. Vu, Van Huong, 2012. "Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs," MPRA Paper 40708, University Library of Munich, Germany.

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