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Bundling and exporting: evidence from German SMEs

Author

Listed:
  • Aquilante, Tommaso

    () (Bank of England)

  • Vendrell-Herrero, Ferran

    () (University of Birmingham)

Abstract

This paper studies the effect of bundling products and services on the export performance of firms. Using a unique sample, we document several facts about German small and medium enterprises (SMEs). First, bundling is a relatively rare activity, which is unevenly spread across sectors. Second, SMEs that bundle products and services are more productive than those selling products and services separately. Third, these firms tend to be more internationally oriented. While most of the existing literature focuses on large firms, we contribute to the literature by uncovering a robust positive relation between product-service bundling and exporting in SMEs. Importantly, the competitiveness-enhancing effect of bundling goes beyond manufacturing, affecting non-manufacturing firms also. To mitigate endogeneity concerns, we exploit the panel structure of the data and implement several (doubly robust) propensity score matching techniques.

Suggested Citation

  • Aquilante, Tommaso & Vendrell-Herrero, Ferran, 2019. "Bundling and exporting: evidence from German SMEs," Bank of England working papers 781, Bank of England.
  • Handle: RePEc:boe:boeewp:0781
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    References listed on IDEAS

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    More about this item

    Keywords

    Bundling; innovation; export; SMEs;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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