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Pattern, Determinants and Dynamics of Austrian Service Exports – A Firmlevel Analysis

Author

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  • Yvonne Wolfmayr
  • Elisabeth Christen
  • Michael Pfaffermayr

Abstract

Most firm-level research on the characteristics and strategies of globalized firms focuses on manufacturing industries while firm-level evidence on trade in services is still rare and has just recently begun to emerge. This study uses an unique dataset of Austrian service exporting firms over a four-year period to add to this literature. We show that service export participation is very low and highly concentrated among a few firms and that service exporters are on average larger and more productive than non-exporters. We also find that firm productivity increases with the number of export markets served. The detailed analysis on the export premium suggests the self-selection of firms as well as learning effects from exporting for export starters. The dynamic analysis reveals that the rate of export exits is high for export starters in the first year of exporting, especially for firms of small size. Movements into and out of exporting are however less frequent than moving in and out of individual markets. Entry and exit of markets (extensive margin) is an important component of overall export flows, especially for less popular markets, overall, however the intensive margin of trade contributes most. Analysis based on a Heckman sample selection specification including firm characteristics as well as the standard gravity variables on geographical characteristics of destination markets confirm this finding. In particular, distance to the destination market, firm productivity as well as destination market characteristics (market size, policy environment) significantly influence the probability of exporting but even more so the volume of service trade flows. Results from the counterfactual analysis suggest that export market growth and policy reforms produce the relative strongest impact on the entry into new markets. Hence, this decomposition of overall export growth into contributions attributable to the extensive and intensive margin allow for new insights for economic policy.

Suggested Citation

  • Yvonne Wolfmayr & Elisabeth Christen & Michael Pfaffermayr, 2013. "Pattern, Determinants and Dynamics of Austrian Service Exports – A Firmlevel Analysis," FIW Research Reports series IV-005, FIW.
  • Handle: RePEc:wsr:ecbook:2013:i:iv-005
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. N. N., 2017. "WIFO-Monatsberichte, no 1/2017," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(1), January.
    2. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    3. Elisabeth Christen & Sandra Bilek-Steindl & Christian Glocker & Harald Oberhofer, 2017. "Austria 2025 – Austria's Competitiveness and Export Potentials in Selected Markets," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(1), pages 83-95, January.
    4. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Migration and Servicification: Do Immigrant Employees Spur Firm Exports of Services?," Ratio Working Papers 298, The Ratio Institute.
    5. 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.
    6. Harald Oberhofer, 2014. "Die Wettbewerbsfähigkeit der österreichischen Exportwirtschaft: Die Rolle der KMUs," FIW Policy Brief series 025, FIW.
    7. Iza Lejárraga & Harald Oberhofer, 2015. "Performance of small- and medium-sized enterprises in services trade: evidence from French firms," Small Business Economics, Springer, vol. 45(3), pages 673-702, October.
    8. 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.
    9. Falk, Martin & Hagsten, Eva, 2015. "Export behaviour of micro firms in the Swedish computer and business service industries," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-24.

    More about this item

    Keywords

    service trade; firm-level evidence; export productivity premium; intensive and extensive margin of trade; gravity model; firm heterogeneity; sample selection; market coverage;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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