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Self-Selection into Export Markets by Business Services Firms: Evidence from France, Germany and the United Kingdom

  • Wagner, Joachim
  • Temouri, Yama
  • Vogel, Alexander

This study reports results from an empirical investigation of business services sector firms that (start to) export, comparing exporters to firms that serve the national market only. We estimate identically specified empirical models using comparable enterprise level data from France, Germany, and the United Kingdom. Exporters are more productive and pay higher wages on average in all three countries. Results for profitability differ across borders – profitability of exporters is significantly smaller in Germany, significantly larger in France, and does not differ significantly in the UK. The results for wages and productivity hold in the years before the export start, which indicates self-selection into exporting of more productive services firms that pay higher wages. The surprising finding of self-selection of less profitable German business services firms into exporting does not show up among firms from France and the UK where no statistically significant relationship between profitability and starting to export is found.

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File URL: http://econstor.eu/bitstream/10419/48700/1/VfS_2011_pid_354.pdf
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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis with number 48700.

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Date of creation: 2011
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Handle: RePEc:zbw:vfsc11:48700
Contact details of provider: Web page: http://www.socialpolitik.org/
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  1. Kox, Henk L.M. & Rojas Romasgosa, Hugo, 2010. "Exports and productivity selection effects for Dutch firms," MPRA Paper 24390, University Library of Munich, Germany.
  2. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
  3. Schmalensee, Richard, 1989. "Inter-industry studies of structure and performance," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009 Elsevier.
  4. Wagner, Joachim, 2002. "The causal effects of exports on firm size and labor productivity: first evidence from a matching approach," Economics Letters, Elsevier, vol. 77(2), pages 287-292, October.
  5. Jozef Konings & Alan Patrick Murphy, 2006. "Do Multinational Enterprises Relocate Employment to Low-Wage Regions? Evidence from European Multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(2), pages 267-286, July.
  6. Joachim Wagner, 2007. "Export Entry, Export Exit, and Productivity in German Manufacturing Industries," Jena Economic Research Papers 2007-062, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  7. The International Study Group on Exports and Productivity & Mauro Pisu, 2008. "Exports and productivity – comparable evidence for 14 countries," Working Paper Research 128, National Bank of Belgium.
  8. Alexander Vogel, 2009. "The German Business Services Statistics Panel 2003 to 2007," Working Paper Series in Economics 127, University of Lüneburg, Institute of Economics.
  9. Mirabelle Muuls & Mauro Pisu, 2007. "Imports and exports at the level of the firm: evidence from Belgium," LSE Research Online Documents on Economics 19711, London School of Economics and Political Science, LSE Library.
  10. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Wiley Blackwell, vol. 30(1), pages 60-82, 01.
  11. Daniel S. Hamermesh, 2000. "The Craft of Labormetrics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
  12. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," ZEW Discussion Papers 08-085, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Daniel S. Hamermesh, 2007. "Viewpoint: Replication in economics," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 715-733, August.
  14. Kelle, Markus & Kleinert, Jörn, 2010. "German firms in service trade," Economics Working Papers 2010,03, Christian-Albrechts-University of Kiel, Department of Economics.
  15. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
  16. Daniel S. Hamermesh, 2000. "The Craft of labormetrics," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
  17. John W. Budd & Jozef Konings & Matthew J. Slaughter, 2005. "Wages and International Rent Sharing in Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 73-84, February.
  18. Sylvia Zühlke & Markus Zwick & Sebastian Scharnhorst & Thomas Wende, 2004. "European Data Watch: The research data centres of the Federal Statistical Office and the statistical offices of the Länder," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 124(4), pages 567-578.
  19. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  20. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
  21. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2010. "Higher wages in exporting firms: self-selection, export effect, or both? First evidence from linked employer-employee data," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(2), pages 303-322, June.
  22. Alexander Vogel & Joachim Wagner, 2010. "Exports and Profitability - First Evidence for German Business Services Enterprises," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(1), pages 7-30.
  23. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  24. Alexander Vogel, 2009. "Exporter performance in the German business services sector," The Service Industries Journal, Taylor & Francis Journals, vol. 31(7), pages 1015-1031, May.
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