EconPapers    
Economics at your fingertips  
 

Exports and Profitability: First Evidence for German Manufacturing Firms

Helmut Fryges and Joachim Wagner ()

No 08-085, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Using unique recently released nationally representative high-quality longitudinal data at the enterprise level for Germany, this paper presents the first comprehensive evidence on the relationship between exports and profitability. It documents that the positive profitability differential of exporters compared to non-exporters is statistically significant, though rather small, when observed firm characteristics and unobserved firm specific effects are controlled for. In contrast to nearly all empirical studies on the relationship between productivity and exports we do not find any evidence for selfselection of more profitable firms into export markets. Due to the sampling frame of the data used we cannot test the hypothesis that firms which start exporting perform better in the years after the start than their counterparts which do not start. Instead, we use a newly developed continuous treatment approach and show that exporting improves the profitability almost over the whole range of the export-sales ratio. Only firms that generate 90 percent and more of their total sales abroad do not benefit from exporting in terms of an increased rate of profit. This means, that the usually observed higher productivity of exporters is not completely absorbed by the extra costs of exporting or by higher wages paid by internationally active firms.

Keywords: exports; profitability; micro data; Germany (search for similar items in EconPapers)
JEL-codes: F14 D21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-int
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/27562/1/dp08085.pdf (application/pdf)

Related works:
Chapter: Exports and Profitability — First Evidence for German Manufacturing Firms (2016) Downloads
Journal Article: Exports and Profitability: First Evidence for German Manufacturing Firms (2010) Downloads
Working Paper: Exports and Profitability: First Evidence for German Manufacturing Firms (2008) Downloads
Working Paper: Exports and Profitability - First Evidence for German Manufacturing Firms (2008) Downloads
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:zbw:zewdip:7427

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2020-01-08
Handle: RePEc:zbw:zewdip:7427