Exports, imports and firm survival: first evidence for manufacturing enterprises in Germany
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Exports, imports and firm survival: first evidence for manufacturing enterprises in Germany Joachim Wagner
Published online: 8 November 2012 Ó Kiel Institute 2012
Abstract This paper investigates the links between firm survival and three types of international trade activities—exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods. The paper contributes to the literature by providing the first evidence on the role of imports and two-way trading for firm survival in a highly developed country. The result indicate a strong positive link between firm survival on the one hand and imports and two-way trading on the other hand, while exporting alone does not play a role for exiting the market or not. Keywords
Exports Imports Firm survival
JEL Classification
F14
Earlier versions were presented at the ISGEP 2011 Workshop, at the German Bundesbank and in the research seminar of the Institute of Economics at Leuphana University Lu¨neburg. All computations for this study were done inside the research data center of the Statistical Office of Berlin-Brandenburg. The firm level data used are confidential but not exclusive; see Zu¨hlke et al. (2004) for a description of how to access the data. To facilitate replication the Stata do-files are available from the author on request. Electronic supplementary material The online version of this article (doi:10.1007/s10290-012-0141-2) contains supplementary material, which is available to authorized users. J. Wagner (&) Institute of Economics, Leuphana University Lueneburg, P.O. Box 2440, 21314 Lueneburg, Germany e-mail: [email protected] URL: http://www.leuphana.de/joachim-wagner.html J. Wagner IZA, Bonn, Germany
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1 Motivation Since the publication of the Brookings Paper by Bernard and Jensen (1995) a large and still growing empirical literature emerged that discusses the mutual links between international trade and firm performance.1 The most prominent topic in this literature is the relationship between productivity and exports,2 not least due to the central role played by productivity in the Melitz (2003) model of an exporting firm and the many variants of this model that are at the core of what is labelled the new new international trade theory. More recently, empirical investigations looked beyond exports and investigated the links between imports and productivity3 or the relationships between productivity and both exports and imports.4 Stakeholders in firms, however, care for other dimensions of firm performance, too. Workers care for working conditions in general and especially for wages. Shareholders are interested in stock prices, dividends and profits. All of them care for the long-run development of the firm and for firm survival as the ultimate goal. The links between international trade and firm survival are the topic of this paper. Why should we expect that international trade activities and firm survival are linked, and in
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