Does Exporting Improve Matching? Evidence from French Employer-Employee Data

Matilde Bombardini, Gianluca Orefice and Maria D. Tito

No 21225, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Does opening a market to international trade affect the pattern of matching between firms and workers? And does the modified sorting pattern affect welfare? This paper answers these questions both theoretically and empirically in three parts. We set up a model of matching between heterogeneous workers and firms where variation in the worker type at the firm level exists in equilibrium only because of the presence of search costs. When firms gain access to the foreign market their revenue potential increases. When stakes are high, matching with the right worker becomes particularly important because deviations from the ideal match quickly reduce the value of the relationship. Hence exporting firms select sets of workers that are less dispersed relative to the average. We then document a novel fact about the hiring decisions of exporting firms versus non-exporting firms in a French matched employer-employee dataset. We find that exporting firms feature a lower type dispersion in the pool of workers they hire. The matching between exporting firms and workers is even tighter in sectors characterized by better exporting opportunities as measured by foreign demand or tariff shocks. In a calibrated general equilibrium version of the model we show that trade opening increases welfare by more when search costs are high, pointing to an additional source of gains from trade.

JEL-codes: F16 J2 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-int and nep-lma
Note: ITI
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Citations: View citations in EconPapers (10)

Published as Matilde Bombardini & Gianluca Orefice & Maria D. Tito, 2018. "Does exporting improve matching? Evidence from French employer-employee data," Journal of International Economics, .

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Journal Article: Does exporting improve matching? Evidence from French employer-employee data (2019)
Working Paper: Does Exporting Improve Matching? Evidence from French Employer-Employee Data (2015)
Working Paper: Does Exporting Improve Matching? Evidence from French Employer-Employee Data (2015)
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