IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Determinants of Service Imports: The Role of Cost Pressure and Financial Constraints

  • Elena Biewen

    ()

  • Daniela Harsch
  • Julia Spies

    ()

This study provides evidence on how German multinational firms restructured their service activities during the last decade. Making use of new micro-level data on service imports of German multinationals from 2002-2008, we assess the determinants of service offshoring along the extensive and intensive margins. In particular, we evaluate how internal frictions in terms of lower sales level (per employee) and external frictions in terms of a reduced availability of credit co-determine the likelihood and the extent of sourcing services from abroad. First, we find a decreasing probability of starting to import services from abroad if firms are already under cost pressure. By contrast, firms intensify existing linkages of service imports in times of a sales drop. Second, financial constraints, which play a major role for goods trade, do not have any significant effect on service imports. These results are in line with the argument that the generally observed crisis-resilience of service trade stems from increased pressures to save on variable costs through offshoring and from its lower dependence on external finance. Furthermore, we find that a decline in sales and labor productivity induces firms to sort into intra-firm rather than arm’s-length trading.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.iaw.edu/RePEc/iaw/pdf/iaw_dp_90.pdf
Download Restriction: no

Paper provided by Institut für Angewandte Wirtschaftsforschung (IAW) in its series IAW Discussion Papers with number 90.

as
in new window

Length: 33 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:iaw:iawdip:90
Contact details of provider: Postal: Ob dem Himmelreich 1, D-72074 Tübingen
Phone: (+49) 7071 98 96 -0
Fax: (+49) 7071 98 96 -99
Web page: http://www.iaw.edu/Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
  2. Amiti, Mary & Weinstein, David E., 2009. "Exports and Financial Shocks," CEPR Discussion Papers 7590, C.E.P.R. Discussion Papers.
  3. Altomonte, Carlo & di Mauro, Filippo & Ottaviano, Gianmarco & Rungi, Armando & Vicard, Vincent, 2012. "Global value chains during the great trade collapse: a bullwhip effect?," Working Paper Series 1412, European Central Bank.
  4. Markus Kelle & Jörn Kleinert & Horst Raff & Farid Toubal, 2012. "Cross-Border and Foreign-Affiliate Sales of Services: Evidence From German Micro-Data," Kiel Working Papers 1771, Kiel Institute for the World Economy.
  5. Ines Buono & Harald Fadinger, 2012. "The micro dynamics of exporting: evidence from French firms," Temi di discussione (Economic working papers) 880, Bank of Italy, Economic Research and International Relations Area.
  6. Vogel, Alexander & Wagner, Joachim, 2008. "Higher Productivity in Importing German Manufacturing Firms: Self-Selection, Learning from Importing, or Both?," IZA Discussion Papers 3854, Institute for the Study of Labor (IZA).
  7. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
  8. 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.
  9. Borchert, Ingo & Mattoo, Aaditya, 2009. "The crisis-resilience of services trade," Policy Research Working Paper Series 4917, The World Bank.
  10. Giuliano Conti & Alessia Lo Turco & Daniela Maggioni, 2010. "Exporters in Services: new Evidence from Italian Firms," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(1), pages 73-98.
  11. Robert C. Feenstra & Zhiyuan Li & Miaojie Yu, 2014. "Exports and Credit Constraints under Incomplete Information: Theory and Evidence from China," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 729-744, October.
  12. Sebastian Hügelschäffer & Daniel Kromer & Alexander Lipponer, 2009. "Die deutsche Statistik über Direktinvestitionen: Neuerungen und wissenschaftliche Nutzung," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 3(3), pages 157-167, November.
  13. Kelle, Markus & Kleinert, Jörn, 2010. "German firms in service trade," Economics Working Papers 2010,03, Christian-Albrechts-University of Kiel, Department of Economics.
  14. Stefano Federico & Enrico Tosti, 2012. "Exporters and importers of services: firm-level evidence on Italy," Temi di discussione (Economic working papers) 877, Bank of Italy, Economic Research and International Relations Area.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iaw:iawdip:90. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rolf Kleimann)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.