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Does Exporting Improve Matching? Evidence from French Employer-Employee Data

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  • Matilde Bombardini
  • Gianluca Orefice
  • Maria D. Tito

Abstract

Does opening a market to international trade affect the pattern of matching between firms and workers? And does the modified sorting pattern affect welfare? This paper answers these questions both theoretically and empirically in three parts. We set up a model of matching between heterogeneous workers and firms where variation in the worker type at the firm level exists in equilibrium only because of the presence of search costs. When firms gain access to the foreign market their revenue potential increases. When stakes are high, matching with the right worker becomes particularly important because deviations from the ideal match quickly reduce the value of the relationship. Hence exporting firms select sets of workers that are less dispersed relative to the average. We then document a novel fact about the hiring decisions of exporting firms versus non-exporting firms in a French matched employer-employee dataset. We find that exporting firms feature a lower type dispersion in the pool of workers they hire. The matching between exporting firms and workers is even tighter in sectors characterized by better exporting opportunities as measured by foreign demand or tariff shocks. In a calibrated general equilibrium version of the model we show that trade opening increases welfare by more when search costs are high, pointing to an additional source of gains from trade.

Suggested Citation

  • Matilde Bombardini & Gianluca Orefice & Maria D. Tito, 2015. "Does Exporting Improve Matching? Evidence from French Employer-Employee Data," NBER Working Papers 21225, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21225
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    Cited by:

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    2. Marchal, Léa & Nedoncelle, Clément, 2017. "How foreign-born workers foster exports," Kiel Working Papers 2071, Kiel Institute for the World Economy (IfW).
    3. Italo Colantone & Alessia Matano & Paolo Naticchioni, 2020. "New imported inputs, wages and worker mobility [Computing person and firm effects using linked longitudinal employer-employee data]," Industrial and Corporate Change, Oxford University Press, vol. 29(2), pages 423-457.
    4. Richard Holt, 2020. "The Costs of Mismatch," Edinburgh School of Economics Discussion Paper Series 298, Edinburgh School of Economics, University of Edinburgh.
    5. Matthieu Crozet & Gianluca Orefice, 2017. "Trade and Labor Market: What Do We Know?," CEPII Policy Brief 2017-15, CEPII research center.
    6. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. GORYUNOV, Maxim, 2017. "Sorting when firms have size," Economics Working Papers MWP 2017/09, European University Institute.
    8. Sarah Schroeder, 2020. "Exporters, Multinationals and Residual Wage Inequality: Evidence and Theory," CESifo Working Paper Series 8701, CESifo.

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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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