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Export characteristics and output volatility: comparative firm-level evidence for CEE countries

Author

Listed:
  • Urška Èede

    (Banka Slovenije)

  • Bogdan Chiriacescu

    (Banca Nationala a României)

  • Péter Harasztosi

    (Magyar Nemzeti Bank)

  • Péter Harasztosi

    (Magyar Nemzeti Bank)

  • Tibor Lalinsky

    () (National Bank of Slovakia, Research Department)

  • Jaanika Meriküll

    (Eesti Pank)

Abstract

The literature shows that openness to trade improves long-term growth but also that it may increase exposure to high output volatility. In this vein, our paper investigates whether exporting and export diversification at the firm-level have an effect on the output volatility of firms. We use large representative firm-level databases from Estonia, Hungary, Romania, Slovakia and Slovenia over the last boom-bust cycle in 2004-2012. The results confirm that exporting is related to higher volatility at the firm level. There is also evidence that this effect increased during the Great Recession due to the large negative shocks in export markets. In contrast to the literature and empirical findings for large or advanced countries we do not find a statistically significant and consistent mitigating effect from export diversification in the Central and Eastern European countries. In addition, exporting more products or serving more markets does not necessarily result in higher stability of firm sales.

Suggested Citation

  • Urška Èede & Bogdan Chiriacescu & Péter Harasztosi & Péter Harasztosi & Tibor Lalinsky & Jaanika Meriküll, 2016. "Export characteristics and output volatility: comparative firm-level evidence for CEE countries," Working and Discussion Papers WP 3/2016, Research Department, National Bank of Slovakia.
  • Handle: RePEc:svk:wpaper:1039
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    export diversification; export share; volatility of sales; business cycle; Central and Eastern Europe; CEE;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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