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Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises

  • Wagner, Joachim


    (Leuphana University Lüneburg)

This paper documents for the first time the relationship between profitability and three types of international trade activities – exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods, that merge information from surveys performed by the Statistical Offices and administrative data collected by the Tax Authorities. Descriptive statistics and regression analysis (with and without controlling for unobserved firm heterogeneity and the role of outliers) point to the absence of any statistically significant and economically large effects of trade activities on profits. This demonstrates that any productivity advantages of trading firms are eaten up by extra costs related to selling and buying on foreign markets.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5766.

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Length: 34 pages
Date of creation: Jun 2011
Date of revision:
Publication status: published in: Open Economies Review, 2012, 23 (5), 747-765
Handle: RePEc:iza:izadps:dp5766
Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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  1. Wagner, Joachim, 2005. "Exports and Productivity : A survey of the evidence from firm level data," HWWA Discussion Papers 319, Hamburg Institute of International Economics (HWWA).
  2. Flora Bellone & Liza Jabbour & Patrick Musso & Lionel Nesta & Stefano Schiavo, 2007. "Exports and productivity : comparable evidence for 14 countries," Working Papers hal-00973116, HAL.
  3. Alexander Vogel & Joachim Wagner, 2008. "Higher Productivity in Importing German Manufacturing Firms: Self-selection, Learning from Importing, or Both?," Working Paper Series in Economics 106, University of Lüneburg, Institute of Economics.
  4. Kox, Henk L.M. & Rojas Romasgosa, Hugo, 2010. "Exports and productivity selection effects for Dutch firms," MPRA Paper 24390, University Library of Munich, Germany.
  5. The International Study Group on Exports and Productivity, 2007. "Exports and productivity: Comparable evidence for 14 countries," ZEW Discussion Papers 07-069, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," Working Papers 05-11, Center for Economic Studies, U.S. Census Bureau.
  7. Vincenzo Verardi & Joachim Wagner, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(4), pages 546-557, August.
  8. Wagner, Joachim & Temouri, Yama & Vogel, Alexander, 2011. "Self-Selection into Export Markets by Business Services Firms: Evidence from France, Germany and the United Kingdom," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48700, Verein für Socialpolitik / German Economic Association.
  9. Alexander Vogel & Stefan Dittrich, 2008. "The German turnover tax statistics panel," Working Paper Series in Economics 92, University of Lüneburg, Institute of Economics.
  10. Delgado, Miguel A. & Farinas, Jose C. & Ruano, Sonia, 2002. "Firm productivity and export markets: a non-parametric approach," Journal of International Economics, Elsevier, vol. 57(2), pages 397-422, August.
  11. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," ZEW Discussion Papers 08-085, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  12. Marco Grazzi, 2009. "Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms," LEM Papers Series 2009/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  13. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March.
  14. repec:bai:series:wp0027 is not listed on IDEAS
  15. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages F134-F161, 02.
  16. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2006. "Do exporters really pay higher wages? First evidence from German linked employer-employee data," Working Paper Series in Economics 28, University of Lüneburg, Institute of Economics.
  17. International Study Group on Exports and Productivity (ISGEP), 2008. "Understanding Cross-Country Differences in Exporter Premia: Comparable Evidence for 14 Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 596-635, December.
  18. Maria Caterina Bramati & Christophe Croux, 2007. "Robust estimators for the fixed effects panel data model," Econometrics Journal, Royal Economic Society, vol. 10(3), pages 521-540, November.
  19. Alexander Vogel & Joachim Wagner, 2009. "Exports and Profitability – First Evidence for German Business Services Enterprises," Working Paper Series in Economics 129, University of Lüneburg, Institute of Economics.
  20. 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, vol. 146(2), pages 303-322, June.
  21. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
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