Decomposing service exports adjustments along the intensive and extensive margin at the firm‐level

Elisabeth Christen, Michael Pfaffermayr and Yvonne Wolfmayr

Review of International Economics, 2019, vol. 27, issue 1, 155-183

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 a 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. Increases in firm size as well as changes in distance related costs are most effective in developing new export relationships in services.

Date: 2019
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https://doi.org/10.1111/roie.12365

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Working Paper: Decomposing Service Exports Adjustments along the Intensive and Extensive Margin at the Firm-Level (2017)
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