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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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    More about this item

    Keywords

    Trade; Firm heterogeneity; Employment volatility;
    All these keywords.

    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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