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Exports, imports and profitability: First evidence for manufacturing enterprises

Author

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  • Joachim Wagner

    (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

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.

Suggested Citation

  • Joachim Wagner, 2011. "Exports, imports and profitability: First evidence for manufacturing enterprises," Working Paper Series in Economics 206, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:206
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    9. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2016. "Do Exporters Really Pay Higher Wages? First Evidence from German Linked Employer–Employee Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 5, pages 177-213, World Scientific Publishing Co. Pte. Ltd..
    10. 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.
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    More about this item

    Keywords

    exports; imports; profitability;
    All these keywords.

    JEL classification:

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

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