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Decomposing Service Exports Adjustments along the Intensive and Extensive Margin at the Firm-Level

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  • Elisabeth Christen

    (WIFO)

  • Michael Pfaffermayr
  • Yvonne Wolfmayr

Abstract

Using a panel-data set of Austrian service exporting firms this paper examines the determinants of service exports at the firm-destination country level. We implement a random-effects Heckman sample selection firm-level gravity model as well as a fixed effects Poisson model. Expected firm-level service exports are decomposed into the intensive and extensive margins of adjustment as a response to counterfactual changes. We find market demand to be the key determinant. Results also suggest high service export potentials due to regulatory reform in partner countries within the EU. Adjustments at the extensive margin only play a marginal role. Increasing firm size as well as changes in distance related costs are most effective in developing new export relationships in services.

Suggested Citation

  • Elisabeth Christen & Michael Pfaffermayr & Yvonne Wolfmayr, 2017. "Decomposing Service Exports Adjustments along the Intensive and Extensive Margin at the Firm-Level," WIFO Working Papers 537, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2017:i:537
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    Cited by:

    1. Martin Falk & Werner Hölzl & Harald Oberhofer, 2015. "Die Bedeutung von unternehmensbezogenen Individualdaten für die empirische Wirtschaftsforschung und wirtschaftspolitische Beratung," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(11), pages 845-857, November.
    2. Krieger, Bastian & Trottner, Fabian, 2024. "Trade in services and innovation," ZEW Discussion Papers 24-056, ZEW - Leibniz Centre for European Economic Research.
    3. Klaus Friesenbichler & Jürgen Janger & Agnes Kügler & Andreas Reinstaller, 2020. "Auswirkungen der COVID-19-Pandemie auf die Forschungs- und Innovationsaktivität," WIFO Studies, WIFO, number 66049, January.
    4. Wifo, 2015. "WIFO-Monatsberichte, Heft 11/2015," WIFO Monatsberichte (monthly reports), WIFO, vol. 88(11), November.
    5. Alessandro Moro & Enrico Tosti, 2020. "The determinants of service export behaviour in Italian non-financial firms," Questioni di Economia e Finanza (Occasional Papers) 577, Bank of Italy, Economic Research and International Relations Area.

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    Keywords

    Firm heterogeneity; Firm-level evidence; Gravity model; Intensive and extensive margin of trade; Sample selection; Services trade;
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