Does immigrant employment matter for export sales? Evidence from Denmark

Immigration impacts on the economy in ample ways: it affects growth, wages and total factor productivity. This study deals with the effects of immigration on firm exports. Can firms benefit from hiring immigrants to expand their export sales? Or do immigrants who live in the firm’s region affect trade? In contrast to the existing literature, we are able to distinguish these two distinct channels. Using matched employer-employee data from Denmark for the years 1995–2005, we provide novel insights in the nexus between exports and immigration. We further contribute to the literature by providing first evidence on the adjustment of firms’ product portfolio in response to immigration. Our empirical results are consistent with the claim that immigration lowers barriers to trade. Both, regional immigration and foreign employment matter for the composition of firm-level exports. As a novel insight, our findings suggest that firms benefit from immigration in terms of expanded export sales, when they hire foreign employees. We only find weak evidence for the local presence of foreigners to increase export sales, which we ascribe to the conjecture that at least some trade-cost reducing forces of immigration like for example intercultural knowledge or personal and business networks abroad, can only be accessed or exploited via foreign employment.     

Export Activity,Firm Size and Wage Structure: Evidence from Taiwanese Manufacturing Firms*

This study adopts a semiparametric smooth coefficient model to evaluate the export–wage premiums, firm size–wage premiums, and the wage gap between skilled and unskilled labor. Particular focus is placed upon widespread evidence indicating that pay levels in ‘large’ and ‘export‐oriented’ firms are higher than in their ‘small’ and ‘domestic‐oriented’ counterparts. Applying the firm‐level data for Taiwanese manufacturing firms, we find a positive export–wage premium for skilled workers and a negative export–wage premium for unskilled workers. The hypothesis of a constant export premium across firm size is rejected. While most of the export–wage premiums for skilled labor can be attributed to the small and medium firms, the large exporting firms have a significant adverse effect on wages for unskilled labor. Moreover, our results suggest that the firm size–wage premiums for skilled workers are larger than those for unskilled workers. The wage gap between the two skill groups is also sensitive to size categories.     

International Involvement and Production Efficiency among Startup Firms

The economic theory of small firms often requires a reasoning process distinct from those typically used for large multinational enterprises (MNEs), since small firms typically do not possess the resources MNEs commonly employ to outperform similar domestic firms. In the current analysis, we argue that new small firms with international sales can better predict their revenue stream than can comparably aged firms with only domestic sales, and, as a result, international selling firms have higher levels of technical productive efficiency. We employ 7829 firm-year observations from the 2007 to 2011 years of the Kauffman Firm Survey microdata sample in our analysis. A stochastic frontier model empirically supports the result that technical productive efficiency is positively related to the foreign sales ratio. These results hold after controlling for multiple relevant owner and firm characteristics, as well as accounting for potential endogeneity concerns.     

Trading firms in the services sectors: comparable evidence from four EU countries

We establish a set of stylised facts for trade and trading firms in five market services sectors using comparable firm- and activity-level data from four EU countries. Our analysis shows that exports account for much lower shares of overall sales in the services sectors than in manufacturing. This is because fewer firms are engaged in trade in the services sectors and also because within particular sectors firms trade a lower share of their sales on average. Services producers trade mostly goods, but in terms of value, trade in services is much more important to them than to manufacturers. Larger and more productive firms are more likely to be two-way traders and to engage in both goods and services trade. Trade by services firms is somewhat less dominated by firms that both export and import than trade by manufacturing firms. Few firms export many services or to many countries. The value of services exports is increasing in the number of markets served but not necessarily in the number of services traded.     

出口行为与企业生存:内部资源、政府补贴重要吗

文章利用1998-2011年新成立的中国工业企业纵向数据,采用Cox比例风险模型估计方法,实证检验了出口行为对企业生存的影响效应及内部资源、政府补贴的调节效应。研究结果表明,出口倾向负向影响企业生存,而出口强度与企业生存之间存在非线性的“S型”关系。管理冗余和创新资源显著调节出口行为与企业生存之间的关系,有效缓冲了出口企业在国外市场面临的生存风险。然而,财务冗余和政府补贴对出口行为与企业生存关系的调节效应并不显著。采用加速失效时间模型进行稳健性检验,本项研究的结论依然成立。     

Assessing Productivity Gains from International Trade in a Small Open Economy

Empirical evidence suggests that exporter firms tend to charge higher markups than non-exporters due to trade barriers. The exporters’ markup premium, however, may disappear in a special case, namely when the home country is small relative to its trade partners and trade barriers are low. This can be because competition is more intense in the large export destination than in the small home country, so that firms are able to set higher markups for locally sold products but not for exports. This paper provides empirical evidence on the validity of this special case by estimating markups for firms in Luxembourg who generally export to larger countries. The estimated negative markup premium for exporters has important implications for the productivity measurement. In a sufficiently small open economy, exporters’ productivity may be biased downward, when the firm-level markup variation is not controlled for in the productivity estimation. The bias in the productivity estimates further leads to the inaccurate conclusion that openness to international trade lowers allocative efficiency.     

Demonstration or congestion? Export spillovers in Sweden

A key feature of the Swedish economy over the last two decades has been the rapid internationalisation of its economy, both through FDI and exports. In this paper we consider their inter-relationship, examining whether there have been spillovers from foreign firms to the export performance of domestic firms. We also contribute to the empirical modelling of export spillovers. We do this by exploiting information on whether foreign MNE sales are intra-firm or inter-firm, and by allowing for heterogeneity in the characteristics of the sender and receiver of spillovers. Our results indicate that foreign MNEs had positive effects on Swedish exports.     

Unobserved firm heterogeneity and the size-exports nexus: Evidence from German panel data

This paper starts from the stylized fact that firm size and exporting tends to be positively related. Using large sets of establishment panel data for three different industries from official statistics, evidence is presented that the familiar picture of an export/sales ratio that increases (at a decreasing rate) with firm size vanishes if unobserved firm heterogeneity is controlled for in a fixed-effects fractional logit regression model. This finding is well in line with the fact that many small firms are “hidden export champions.” JEL no. F10, D21, L60     

Product and destination mix in export markets

This article studies the joint destination and product strategies of exporters, using the universe of export transactions for firms located in Portugal in the period 1995–2005. The article breaks down the annual growth rate of total exports along different margins and details choices made by multi-product, multi-destination firms regarding their export portfolio. In addition, the article looks at similar features for the subsample of new exporters. We find that both the firm-level extensive and intensive margins are important in driving the year-to-year variation in aggregate exports. However, variation over time in the sales of continuing exporters is mainly driven by their sales in continuing destinations. In addition, a product’s export tenure within a firm varies largely across currently exported products in the context of an intense activity of product and destination switching. Moreover, the higher the importance of a product, the more its sales are concentrated in the firm’s top destination. Finally, the article finds that, while continuing exporters enter new markets mainly by selling old products, new exporters access new destinations mainly by exporting new products.     

Trade Propensities and Foreign Ownership Shares in Indonesian Manufacturing

This paper examines the relationship between trade propensities and foreign ownership shares in Indonesian manufacturing in 1992 and 1994. Foreign plants had relatively high trade propensities, and plants with high foreign ownership shares had the highest export propensities. Differences in import propensities among foreign ownership groups were relatively small. It might be argued that trade propensities determine foreign ownership shares in Indonesia, which historically waives foreign ownership restrictions for firms that export much of their output. However, this paper argues that causation runs from foreign ownership shares to trade propensities, because multinational firms have strong incentives to restrict access by uncontrolled affiliates to their international marketing networks, and because the relationship persists even when the effects of policy distortions are accounted for. Correspondingly, ownership restrictions that discriminate among foreign ownership groups are likely to reduce the exports of foreign multinational affiliates, but to have a much weaker effect on imports.     

Global production networks and China's processing trade

This paper unveils a systematic pattern in China's processing trade. In a cross-section of Chinese provinces, the average distance traveled by processing imports (import distance) is negatively correlated to the average distance traveled by processing exports (export distance). To explain this pattern, we set up a three-country industry-equilibrium model in which heterogeneous firms from two advanced countries, East and West, sell their products in each other's markets. Each firm can use two modes to serve the foreign market. It can directly export its products from its home country. Alternatively, it can indirectly export to the foreign market by assembling its product in a third low-cost country, China, which is located in the vicinity of East. Our model establishes two theoretical predictions relating China's geographical location to its processing trade patterns. First, China's processing exports are negatively affected by both an increase in import distance and a rise in export distance. Second, China's processing exports to East Asian countries are more sensitive to export distance and less sensitive to import distance than its processing exports to non-Asian countries. We find empirical support for both predictions.     

Integration, trade costs and the export behaviour of firms: Empirical evidence on the venables model

Conclusions Theoretical considerations and empirical evidence presented in this paper clearly indicate that economic integration helps firms in old member countries to augment their exports to the new member states. The increase in the export value is, to a large extent, due to new exporters entering the new markets, and only to a small extent due to an increase in average export value per firm. This effect is stronger for small-scale exporters than for medium- and large-scale exporters. In addition to the other benefits, economic integration appears to be peculiarly beneficial to small firms, as it allows them to access new markets previously closed to them.     

Does gender structure affect firm productivity? Evidence from China

This study examines the impact of gender workforce composition on firm productivity. Using a large sample of Chinese manufacturing firms and conditional on human capital-related controls, we find that firms with a greater share of female workers demonstrate lower productivity. However, our results suggest that increasing the fraction of highly educated female workers significantly improves firm performance. This effect is evident for all private firms regardless of their trade orientation and foreign firms undertaking purely domestic sales. However, the effect does not exist in the case of state-owned and export-oriented foreign enterprises. Compared with medium-sized and large firms, small firms benefit more from gender diversity at high education level. Finally, the share of highly talented female workers indicates better firm performance in more feminized industries.     

FDI and the Export Performance of Chinese Indigenous Firms: a Regional Approach

The primary purpose of this paper is to examine the impact of Foreign Direct Investment (FDI) on the export performance of Chinese indigenous firms. A panel data analysis is employed using data across 29 provinces over the 1985–99 period. Owing to the exceptionally uneven distribution of FDI, the analysis compares the impact of FDI on all provincial exports and exports of indigenous firms over the three macro-regions of China. While the findings of the empirical analysis should be viewed with caution, they do show that FDI has less influence on the export performance of indigenous firms than on all firms (foreign and indigenous). The findings imply that linkages between the foreign and domestic sectors need to be improved if FDI is to be a vehicle for improving the competitiveness of domestic firms. Alternatively, policies may have to be directed towards the indigenous firms themselves to enhance their export performance.     

Comparisons of Foreign Multinationals and Local Firms in Asian Manufacturing over Time

This paper first shows that shares of foreign multinational corporations (MNCs) in the manufacturing sectors of five Asian host economies (Hong Kong, Indonesia, Malaysia, Singapore and Taiwan) were generally large in terms of exports, small in terms of employment and moderate in terms of production. Correspondingly, the average product of labour and export propensities were often significantly higher in foreign MNCs than in local firms. In addition, foreign MNCs tended to be relatively large and to have relatively high average capital productivity, capital intensity, skilled-labour intensity, R&D intensity, profit rates and import propensities, but relatively low shares of labour compensation in value added, and these differences were also statistically significant in many cases. Differences between wholly- or heavily-foreign plants and foreign plants with lower foreign ownership shares were also significant in many cases and generally in the same direction as the differences between MNCs and local plants noted above. Differences among MNCs by foreign source were generally small and insignificant in Hong Kong. In Singapore, European and US firms tended to be larger and characterized by relatively high average labour productivity, capital intensity, profitability and export propensities, but relatively low shares of labour compensation in value added compared to Japanese and other Asian firms.     

The impact of foreign direct investment on export structure and employment generation

The literature on foreign direct investment often treats its determinants and consequences independently. This is particularly so for empirical studies. The purpose of this paper is to consider both aspects simultaneously and to provide some empirical evidence on the nature of foreign investment and its impact on export structure and employment generation. The method consists of a model which includes both industry-specific and location-specific determinants of foreign direct investment in the export sector and their effects on the employment generating capacity of individual manufacturing industries. It is estimated for three-digit S.I.C. industries in Puerto Rico in 1979. The results suggest that Puerto Rico's export sector consists of US based firms producing on a large scale. These firms are primarily attracted to the island by relatively higher profits than on the mainland. Low wage labor is not considered an important inducement to foreign investment in Puerto Rico. The labor intensity of the island's export sector lags behind that of comparable countries due to the capital-intensive nature of its principal exports. The island's manufacturing employment can be more effectively increased by altering the composition of exports than by inducing present firms to hire more workers.     

Offshoring and firm performance: self-selection,effects on performance,or both?

This paper uses unique new data for German manufacturing enterprises from matched regular surveys and a special purpose survey to investigate the causal effect of relocation of activities to a foreign country on firm performance. Compared to non-offshoring firms, firms that relocated activities were larger and more productive, and had a higher share of exports in total sales. These differences existed the year before some firms started to relocate, and this points to self-selection of “better” firms into offshoring. To investigate the causal effects of offshoring, six different variants of a matching approach are used. Contrary to what is often argued we find no evidence for a large negative causal effect of offshoring on employment in Germany.     

Microeconomic mechanisms behind export spillovers from FDI: evidence from Bulgaria

This paper studies how the presence of multinational enterprises affects the export performance of Bulgarian manufacturing firms—export spillovers from FDI. Using export data at the firm/product/destination level for the period 2004–2006, it finds positive forward spillover on export value and quantity, related to quality upgrading. Conversely, it finds negative (or insignificant) backward and horizontal spillover on export flows, related to quality downgrading. When aggregating data at the firm level and considering that a firm can operate in several sectors, the paper shows that the presence of foreign input suppliers allows domestic firms to export additional varieties of lower quality and upgrade the average quality of existing varieties, whereas the presence of foreign customers generates the opposite effect.     

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

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. We find that export diversification mitigates volatility only in some cases. Exporting more products or serving more markets does not necessarily result in higher stability of firm sales.     

Geography and firm exports: new evidence on the nature of sunk costs

This paper presents an examination of the trading patterns of individual firms, looking at their coverage of export markets and movements into and out of destinations. This analysis is made possible by access to a new survey data set of Irish firms, which includes detailed information on firm characteristics and on the destinations of their exports over a 2-year period. In line with Eaton et al. (Am Econ Rev 94:150–154, 2004), we find that a large number of firms serve only the domestic market and many exporting firms export to a single foreign market. Although there is little movement of firms into and out of exporting, firms’ involvement in individual export markets is much more dynamic. Over one-third of firms change their market coverage, usually by entering or exiting one additional market. This is consistent with an interpretation where the bulk of any sunk cost encountered in exporting is incurred during the initial entry to the export market. Subsequent entry to additional markets may be made easier by prior export experience, which could help reduce the sunk cost of extending market coverage.