Dissecting the German export miracle: Plant-level evidence

Daniel Etzel (), Andreas Hauptmann and Hans-Joerg Schmerer ()

Economic Systems, 2013, vol. 37, issue 3, 387-403

Abstract: Wage moderation in Germany is often cited as a major cause of its recent export success. We construct competitiveness measures at both industry and plant level using OECD STAN data in order to confront this hypothesis with empirical evidence. Our results show that plants’ export intensity is positively correlated with German competitiveness. Exploiting a plant-level competitiveness measure, we use a corner solution model that enables us to decompose the total effect into its component effects at the intensive and extensive margins. Our results indicate a positive and significant effect of competitiveness at both margins, but this turns out to be insignificant before the introduction of the Euro. A one standard deviation increase in a plant's competitiveness (about 70%) is associated with a 2% higher probability to become an exporter. At the intensive margin, the same increase in competitiveness leads to a 0.49 percentage point increase in export intensity.

Keywords: Trade; Wage moderation; International comparison; German export miracle; Firm level data (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939362513000526
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:37:y:2013:i:3:p:387-403

DOI: 10.1016/j.ecosys.2013.05.002

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Liu ().