The impact of foreign trade and ownership on enterprise exits: new insights through micro data linking

This paper investigates the relationship between enterprise exits, foreign trade and ownership. It uses a unique dataset which is the result of linking enterprise-level data across various domains in the official business statistics of Germany. The study contributes to the literature by showing how micro data linking can be used as a tool by official statistics to explore new areas of statistical analysis without collecting additional data or increasing the administrative burden of enterprises. Further, the richness of the dataset enables us to overcome some of the limitations in existing empirical studies on the topic and to gain additional insights. The results of the empirical analysis show that enterprises engaged in international trade as exporters or importers have lower exit rates than those selling or buying goods solely on the domestic market. Moreover, we find that foreign controlled enterprises have the highest risks to exit the market, while domestic group heads have the lowest. Differences in the exit probabilities between independent and domestically controlled enterprises cannot be observed.