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Importing, exporting, and firm-level employment volatility

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  • Kurz, Christopher
  • Senses, Mine Z.

Abstract

In this paper, we use detailed trade and transactions data for the U.S. manufacturing sector to document a new set of stylized facts on the theoretically ambiguous relationship between the volatility of employment growth and the trade exposure of a firm. We find that, on average, firms that export are less volatile than non-traders, while importers are more volatile. The substantial variation we document across trading firms, in terms of the duration of time and the intensity with which they trade, the number and type of products they trade, and in terms of the number and characteristics of their trading partners, plays an integral role in explaining the robust association between trading and employment volatility. For trading firms, the frequency of trade is negatively associated with employment volatility. Importers with a higher share of imported inputs (especially manufactured imports) and those that source from more countries and from countries with lower per-capita income experience higher levels of volatility. A higher share of exports, fewer number of export destinations and, export destinations that are further away, and with lower average incomes are associated with higher levels of volatility for exporters.

Suggested Citation

  • Kurz, Christopher & Senses, Mine Z., 2016. "Importing, exporting, and firm-level employment volatility," Journal of International Economics, Elsevier, vol. 98(C), pages 160-175.
  • Handle: RePEc:eee:inecon:v:98:y:2016:i:c:p:160-175
    DOI: 10.1016/j.jinteco.2015.08.003
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    Cited by:

    1. Zlate, Andrei, 2016. "Offshore production and business cycle dynamics with heterogeneous firms," Journal of International Economics, Elsevier, vol. 100(C), pages 34-49.
    2. Hummels, David & Munch, Jakob R. & Xiang, Chong, 2016. "Offshoring and Labor Markets," IZA Discussion Papers 9741, Institute for the Study of Labor (IZA).
    3. Urška Čede & Bogdan Chiriacescu & Péter Harasztosi & Tibor Lalinsky & Jaanika Meriküll, 2018. "Export characteristics and output volatility: comparative firm-level evidence for CEE countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(2), pages 347-376, May.
    4. Adina Ardelean & Miguel Leon-Ledesma & Laura Puzzello, 2017. "Industry Volatility and International Trade," Studies in Economics 1709, School of Economics, University of Kent.
    5. Sourafel Girma & Sandra Lancheros & Alejandro Riaño, 2016. "Global Engagement and Returns Volatility," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 814-833, December.
    6. David Baqaee & Emmanuel Farhi, 2017. "The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten's Theorem," Working Paper 482151, Harvard University OpenScholar.
    7. HIGUCHI Yoshio & KIYOTA Kozo & MATSUURA Toshiyuki, 2016. "Multinationals, Intrafirm Trade, and Employment Volatility," Discussion papers 16087, Research Institute of Economy, Trade and Industry (RIETI).
    8. repec:iza:izawol:journl:2017:n:364 is not listed on IDEAS
    9. Vannoorenberghe, Gonzague & Wang, Zheng & Yu, Zhihong, 2016. "Volatility and diversification of exports: Firm-level theory and evidence," European Economic Review, Elsevier, vol. 89(C), pages 216-247.
    10. repec:iza:izawol:journl:y:2017:n:383 is not listed on IDEAS
    11. Marianne Matthee & Neil Rankin & Carli Bezuidenhout, 2017. "Labour demand and the distribution of wages in South African manufacturing exporters," WIDER Working Paper Series 011, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Trade; Firm heterogeneity; Employment volatility;

    JEL classification:

    • F1 - International Economics - - Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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