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The performance of trading firms in the services sectors Comparable evidence from four EU countries

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  • Damijan, Joe
  • Haller, Stefanie A.
  • Kaitila, Ville
  • Maliranta, Mika
  • Milet, Emmanuel
  • Rojec, Matija
  • Mirza, Daniel

Abstract

We analyse common stylized facts of services firms engaged in trade in a comparative study across four EU member countries. We find that, though relatively less engaged in trade than manufacturing firms, services firms have similar traits. Services firms are more likely to import than to export. Their prevalent type of trade is trade in goods. The complexity of trade activities is increasing in firm size and productivity. Two-way traders outperform one-way traders. Services are more likely to be traded by firms already engaged in trade of goods. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant pre-switching premia. In contrast, learning effects from switching trading status are uncommon. This evidence points to significant fixed cost of being engaged in trade. Thus, the literature on heterogeneous firms is able to explain the sorting of firms into trading and non-trading firms in the services sectors as well.

Suggested Citation

  • Damijan, Joe & Haller, Stefanie A. & Kaitila, Ville & Maliranta, Mika & Milet, Emmanuel & Rojec, Matija & Mirza, Daniel, 2012. "The performance of trading firms in the services sectors Comparable evidence from four EU countries," Discussion Papers 1284, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1284
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    References listed on IDEAS

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    Cited by:

    1. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Migration and Servicification: Do Immigrant Employees Spur Firm Exports of Services?," Ratio Working Papers 298, The Ratio Institute.
    2. repec:esr:resser:bkmnext334 is not listed on IDEAS
    3. Eppinger, Peter S., 2017. "Service offshoring and firm employment," University of Tuebingen Working Papers in Economics and Finance 103, University of Tuebingen, Faculty of Economics and Social Sciences.
    4. Minondo, Asier, 2012. "Trading firms in the Spanish services sector," MPRA Paper 43224, University Library of Munich, Germany.
    5. Dincer, Nergiz & Tekin-Koru, Ayca, 2014. "A League of Their Own: Services Exporters within Goods Exporters," MPRA Paper 53294, University Library of Munich, Germany.

    More about this item

    Keywords

    services sectors; exports; imports; trade in goods and services; trade premia;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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