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Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom

Listed author(s):
  • Temouri, Yama
  • Vogel, Alexander
  • Wagner, Joachim

This study investigates business services firms that (start to) export, comparing exporters to firms that serve the national market only. We estimate identically specified empirical models using comparable enterprise data from France, Germany, and the UK. Our findings show that exporters are on average more productive and pay higher wages in all three countries. However, results for profitability differ across borders, where 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 firms start exporting, 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 services firms into exporting does not show up among firms from France and the UK. In all three countries we do not find evidence for positive effects of exporting on firm performance.

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File URL: http://www.sciencedirect.com/science/article/pii/S0954349X12000094
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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 25 (2013)
Issue (Month): C ()
Pages: 146-158

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Handle: RePEc:eee:streco:v:25:y:2013:i:c:p:146-158
DOI: 10.1016/j.strueco.2012.02.004
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/525148

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  1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  2. Wagner, Joachim, 2002. "The causal effects of exports on firm size and labor productivity: first evidence from a matching approach," Economics Letters, Elsevier, vol. 77(2), pages 287-292, October.
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  6. 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;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 303-322, June.
  7. Helmut Fryges & Joachim Wagner, 2016. "Exports and Profitability — First Evidence for German Manufacturing Firms," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 7, pages 245-277 World Scientific Publishing Co. Pte. Ltd..
  8. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
  9. Alexander Vogel, 2009. "The German Business Services Statistics Panel 2003 to 2007," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(3), pages 515-522.
  10. Schmalensee, Richard, 1989. "Inter-industry studies of structure and performance," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009 Elsevier.
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  24. Markus Kelle & Jörn Kleinert, 2010. "German Firms in Service Trade," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(1), pages 51-72.
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