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Is Export Diversification good for Profitability? First Evidence for Manufacturing Enterprises in Germany

Author

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  • Wagner, Joachim

    () (Leuphana University Lueneburg and CESIS, Stockholm)

Abstract

This paper uses a tailor-made newly available data set for enterprises from manufacturing industries in Germany to investigate for the first time the links between export diversification over destination countries and goods on the one hand and the profitability of the exporting firms on the other hand. We find that profits tend to be larger in firms with less diversified export sales over goods and in firms with more diversified export sales over destination countries.

Suggested Citation

  • Wagner, Joachim, 2014. "Is Export Diversification good for Profitability? First Evidence for Manufacturing Enterprises in Germany," Working Paper Series in Economics and Institutions of Innovation 353, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0353
    as

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    References listed on IDEAS

    as
    1. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, Elsevier.
    2. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2012. "The Empirics of Firm Heterogeneity and International Trade," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 283-313, July.
    3. Braakmann Nils & Wagner Joachim, 2011. "Product Diversification and Profitability in German Manufacturing Firms," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(3), pages 326-335, June.
    4. Joachim Wagner, 2008. "A note on why more West than East German firms export," International Economics and Economic Policy, Springer, vol. 5(4), pages 363-370, December.
    5. Hirsch, Seev & Lev, Baruch, 1971. "Sales Stabilization Through Export Diversification," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 270-277, August.
    6. Ernest H. Hall Jr., 1995. "Corporate Diversification and Perfor Mance: An Investigation of Causality," Australian Journal of Management, Australian School of Business, vol. 20(1), pages 25-42, June.
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    Citations

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    Cited by:

    1. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.
    2. Mercedes Campi & Marco Due~nas & Le Li & Huabin Wu, 2018. "Diversification, economies of scope, and exports growth of Chinese firms," Papers 1801.02681, arXiv.org, revised Jan 2018.
    3. Maria Magdalena Turek Rahoveanu & Adrian Turek Rahoveanu & Cristian Popescu & Gheorghe Adrian Zugravu, 2015. "Entrepreneurial Potential In The Territory Gal Microregion Horezu Village From The Perspective Of 2014-2020," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 397-408.

    More about this item

    Keywords

    Exports; diversification; profitability; Germany;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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