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Higher wages in exporting firms: self-selection, export effect, or both? First evidence from linked employer-employee data

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  • Thorsten Schank

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  • Claus Schnabel

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  • Joachim Wagner

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Abstract

While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer–employee panel data, we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.
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Suggested Citation

  • 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.
  • Handle: RePEc:spr:weltar:v:146:y:2010:i:2:p:303-322
    DOI: 10.1007/s10290-010-0049-7
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    Citations

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    Cited by:

    1. Achim Schmillen, 2016. "The Exporter Wage Premium Reconsidered—Destinations, Distances and Linked Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 531-546, May.
    2. Joachim Wagner, 2012. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," Open Economies Review, Springer, vol. 23(5), pages 747-765, November.
    3. repec:bla:scotjp:v:64:y:2017:i:4:p:327-348 is not listed on IDEAS
    4. Antoni, Manfred & Janser, Markus & Lehmer, Florian, 2015. "The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials," Energy Policy, Elsevier, vol. 86(C), pages 595-613.
    5. Araújo, Bruno César & Paz, Lourenço S., 2014. "The effects of exporting on wages: An evaluation using the 1999 Brazilian exchange rate devaluation," Journal of Development Economics, Elsevier, vol. 111(C), pages 1-16.
    6. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Spatial Economics Research Centre, LSE.
    7. Hernández, Pedro Jesús, 2012. "Is there a Producer Quality Wage Premium similar to the Exporter Wage Premium," UMUFAE Economics Working Papers 28517, DIGITUM. Universidad de Murcia.
    8. Philip Du Caju & François Rycx & Ilan Tojerow, 2012. "Wage structure effects of international trade in a small open economy: the case of Belgium," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 297-331, June.
    9. Temouri, Yama & Vogel, Alexander & Wagner, Joachim, 2013. "Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 146-158.
    10. Wagner, Joachim, 2011. "Productivity and International Firm Activities: What Do We Know?," IZA Policy Papers 23, Institute for the Study of Labor (IZA).
    11. Joachim Wagner, 2010. "The post-entry performance of cohorts of export starters in German manufacturing industries," Working Paper Series in Economics 187, University of Lüneburg, Institute of Economics.
    12. Joachim Wagner, 2012. "Average wage, qualification of the workforce and export performance in German enterprises: evidence from KombiFiD data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 161-170, July.
    13. Francisco Alcalá & Pedro Hernández, 2010. "Firms’ main market, human capital, and wages," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(4), pages 433-458, September.
    14. Vu, Van Huong, 2012. "Does export participation affect wages and employment quality? the case of Vietnamese SMEs," MPRA Paper 38696, University Library of Munich, Germany.
    15. Joachim Wagner, 2013. "Exports, imports and firm survival: first evidence for manufacturing enterprises in Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 113-130, March.
    16. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 235-267, June.
    17. Mats Bergman & Per Johansson, 2011. "Foreign ownership and investment: do firms locate investments close to the headquarter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 621-642, November.
    18. Catherine Y. Co & Thu Kim Nguyen & Tung Nhu Nguyen & Que Nguyet Tran, 2017. "The missing middle: Growing and strengthening Viet Nam’s micro, small, and medium-sized enterprises," WIDER Working Paper Series 072, World Institute for Development Economic Research (UNU-WIDER).
    19. Heinze, Anja, 2010. "Beyond the mean gender wage gap: Decomposition of differences in wage distributions using quantile regression," ZEW Discussion Papers 10-043, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    Exports; Wages; Exporter wage premium; Germany; F10; D21; J31;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade

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