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

Urška Čede, Bogdan Chiriacescu, Péter Harasztosi, Tibor Lalinsky and Jaanika Meriküll
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Urška Čede: Bank of Slovenia
Bogdan Chiriacescu: National Bank of Romania

Review of World Economics (Weltwirtschaftliches Archiv), 2018, vol. 154, issue 2, No 6, 347-376

Abstract: Abstract 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.

Keywords: Export diversification; Export share; Volatility of sales; Business cycle; Central and Eastern Europe; CEE; F14; F43; O57 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (11)

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Working Paper: Export characteristics and output volatility: comparative firm-level evidence for CEE countries (2016)
Working Paper: Export characteristics and output volatility: comparative firm-level evidence for CEE countries (2016)
Working Paper: Export characteristics and output volatility: comparative firm-level evidence for CEE countries (2016)
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DOI: 10.1007/s10290-018-0312-x

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