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The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

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Listed:
  • Jože Damijan
  • Stefanie A. Haller
  • Ville Kaitila
  • Črt Kostevc
  • Mika Maliranta
  • Emmanuel Milet
  • Daniel Mirza
  • Matija Rojec

Abstract

type="main" xml:id="twec12291-abs-0001"> We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm-level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non-traders. Two-way traders outperform one-way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.

Suggested Citation

  • Jože Damijan & Stefanie A. Haller & Ville Kaitila & Črt Kostevc & Mika Maliranta & Emmanuel Milet & Daniel Mirza & Matija Rojec, 2015. "The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries," The World Economy, Wiley Blackwell, vol. 38(12), pages 1809-1849, December.
  • Handle: RePEc:bla:worlde:v:38:y:2015:i:12:p:1809-1849
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lawless, Martina & Studnicka, Zuzanna, 2017. "Services exports and exporters of services," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT334.
    2. Eppinger, Peter S., 2019. "Service offshoring and firm employment," Journal of International Economics, Elsevier, vol. 117(C), pages 209-228.
    3. Łukasz Matuszczak, 2019. "Międzynarodowy handel usługami polskich przedsiębiorstw," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 47-67.
    4. João Amador & Sónia Cabral & Birgitte Ringstad, 2020. "Types of International Traders and the Network of Capital Participations," Working Papers w202004, Banco de Portugal, Economics and Research Department.
    5. Andreas Hatzigeorgiou & Magnus Lodefalk, 2019. "Migration and servicification: Do immigrant employees spur firm exports of services?," The World Economy, Wiley Blackwell, vol. 42(11), pages 3368-3401, November.
    6. Minondo, Asier, 2012. "Trading firms in the Spanish services sector," MPRA Paper 43224, University Library of Munich, Germany.
    7. João Amador & Sónia Cabral & Birgitte Ringstad, 2018. "International trade in services: Evidence for Portuguese firms," Working Papers w201810, Banco de Portugal, Economics and Research Department.
    8. Dincer, Nergiz & Tekin-Koru, Ayca, 2014. "A League of Their Own: Services Exporters within Goods Exporters," MPRA Paper 53294, University Library of Munich, Germany.
    9. Blank, Sven & Egger, Peter H. & Merlo, Valeria & Wamser, Georg, 2018. "A structural quantitative analysis of services trade de-liberalization," Discussion Papers 47/2018, Deutsche Bundesbank.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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