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Unobserved firm heterogeneity and the size-exports nexus: Evidence from German panel data

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  • Joachim Wagner

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Abstract

This paper starts from the stylized fact that firm size and exporting tends to be positively related. Using large sets of establishment panel data for three different industries from official statistics evidence is presented that the familiar picture of an export/sales ratio that ceteris paribus increases (at a decreasing rate) with firm size vanishes if unobserved firm heterogeneity is controlled for in a fixed effects fractional logit regression model. This finding is well in line with the fact that many small firms are 'hidden export champions'.
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  • Joachim Wagner, 2003. "Unobserved firm heterogeneity and the size-exports nexus: Evidence from German panel data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(1), pages 161-172, March.
  • Handle: RePEc:spr:weltar:v:139:y:2003:i:1:p:161-172 DOI: 10.1007/BF02659612
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    References listed on IDEAS

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    1. Joseph Hilbe, 1993. "Generalized linear models," Stata Technical Bulletin, StataCorp LP.
    2. Hirsch, Seev & Adar, Zvi, 1974. "Firm size and export performance," World Development, Elsevier, vol. 2(7), pages 41-46, July.
    3. Alan S. Blinder, 1990. "Learning by Asking Those Who Are Doing," Eastern Economic Journal, Eastern Economic Association, vol. 16(4), pages 297-306, Oct-Dec.
    4. Alessandro Sterlacchini, 2001. "The determinants of export performance: A firm-level study of Italian manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(3), pages 450-472, September.
    5. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
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    Cited by:

    1. Tumusiime, David Mwesigye & Vedeld, Paul & Gombya-Ssembajjwe, William, 2011. "Breaking the law? Illegal livelihoods from a Protected Area in Uganda," Forest Policy and Economics, Elsevier, vol. 13(4), pages 273-283, April.
    2. Helmut Fryges & Alexander Vogel & Joachim Wagner, 2015. "The Impact of R&D Activities on Exports of German Business Services Enterprises: First Evidence from a Continuous Treatment Approach," The World Economy, Wiley Blackwell, vol. 38(4), pages 716-729, April.
    3. Caterina Giannetti & Nicola Jentzsch & Giancarlo Spagnolo, 2010. "Information Sharing and Cross-border Entry in European Banking," CEIS Research Paper 178, Tor Vergata University, CEIS, revised 21 Dec 2010.
    4. Alexander Vogel & Joachim Wagner, 2016. "Exports and Profitability — First Evidence for German Business Services Enterprises," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 8, pages 279-310 World Scientific Publishing Co. Pte. Ltd..
    5. 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..
    6. Maria Bramati & Alberto Gaggero & Edna Solomon, 2015. "International Trade and Domestic Competition: Evidence from Belgium," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(4), pages 383-399, June.
    7. Fryges, Helmut, 2006. "The Export-Growth Relationship: Estimating a Dose-Response Function," ZEW Discussion Papers 06-028, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Alexander Eickelpasch & Alexander Vogel, 2009. "Determinants of Export Behaviour of German Business Services Companies," Working Paper Series in Economics 123, University of Lüneburg, Institute of Economics.
    9. Helmut Fryges & Joachim Wagner, 2008. "Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 695-722.
    10. Joachim Wagner, 2008. "Exports and Firm Characteristics – First Evidence from Fractional Probit Panel Estimates," Working Paper Series in Economics 97, University of Lüneburg, Institute of Economics.
    11. Greenaway, David & Kneller, Richard, 2008. "Exporting, productivity and agglomeration," European Economic Review, Elsevier, vol. 52(5), pages 919-939, July.
    12. Joachim Wagner, 2006. "Politikrelevante Folgerungen aus Analysen mit wirtschaftsstatistischen Einzeldaten der Amtlichen Statistik," Working Paper Series in Economics 16, University of Lüneburg, Institute of Economics.
    13. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
    14. Wagner, Joachim, 2003. "On the micro-structure of the German export boom: Evidence from establishment panel data, 1995 - 2002," HWWA Discussion Papers 249, Hamburg Institute of International Economics (HWWA).
    15. Andreas M. Fischer & Matthias Lutz & Manueal Wälti, 2007. "Who Prices Locally? Survey Evidence of Swiss Exporters," University of St. Gallen Department of Economics working paper series 2007 2007-39, Department of Economics, University of St. Gallen.
    16. Durham, Catherine A., 2007. "The Impact of Environmental and Health Motivations on the Organic Share of Produce Purchases," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
    17. Jérôme Danguy, 2014. "Who collaborates with whom: the role of technological distance in international innovation," iCite Working Papers 2014-010, ULB -- Universite Libre de Bruxelles.
    18. Keller, Dietmar & Jungnickel, Rolf, 2003. "German FDI and Integration of Production in the EU," HWWA Discussion Papers 232, Hamburg Institute of International Economics (HWWA).
    19. Papke, Leslie E. & Wooldridge, Jeffrey M., 2008. "Panel data methods for fractional response variables with an application to test pass rates," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 121-133, July.
    20. Engel, Dirk & Procher, Vivien & Schmidt, Christoph M., 2013. "Does firm heterogeneity affect foreign market entry and exit symmetrically? Empirical evidence for French firms," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 35-47.
    21. Fryges, Helmut, 2006. "Hidden champions - how young and small technology-oriented firms can attain high export-sales ratios," ZEW Discussion Papers 06-045, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    22. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.
    23. Jérôme Danguy, 2014. "Globalization of Innovation Production: A Patent-Based Industry Analysis," iCite Working Papers 2014-009, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Exports; firm size; establishment panel data; fractional logit regression;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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