Exports Margins in Austria’s Export Growth

Recent empirical research in international trade emphasizes the role of the extensive and intensive margin as determinants of countries’ trade patterns. Considering the case of Austria, the present paper uses detailed bilateral export data with 215 partner countries over the period 1998-2011, differentiated by product categories where we distinguish between total goods, final goods and intermediate goods, in order to calculate the contribution of the extensive and intensive margins to Austria’s export performance. Intensive margin are further decomposed into price and quantity margins in order to evaluate the role of to changes in price (quality) and changes in quantity. Unlike previous studies that have mainly used a single approach for the decomposition of exports into its margins, the present paper uses three alternative methods: i) the count method, ii) the decomposition method of export shares proposed by Hummels and Klenow (2005), and iii) the decomposition method of export growth rates by Bingzhan (2011). Results show that the intensive margin is key driver of Austria’s export growth across each product category. Additionally, the results indicate that the growth in the intensive margin of Austria’s exports is mainly explained by quantity growth.