Abstract
This chapter asks if and why advanced countries differ in their ability to export to China and India. To this end we exploit a newly collected, comparable cross-country dataset (EFIGE) obtained from a survey of 15,000 manufacturing firms in Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom. The EFIGE dataset contains detailed information on firms international activities as well as firm characteristics such as size and productivity, governance and management structure, workforce, innovation and research activity. We study both the extensive and intensive margins of exports and identify firm characteristics that are positively or negatively correlated with exporting activity tout court and with exporting to China and India conditional on being an exporter. We confirm previous rich evidence and show that larger, more productive, and more innovative firms are more likely to become exporters and export more. We also provide some new evidence on the role of governance and management: while there does not seem to be a strong negative effect of family ownership, we find that a higher percentage of family management reduces a firms export propensity and export volumes. When we turn to exports to China and India, we find that firms exporting there must be on average larger, more productive, and more innovative than firms exporting elsewhere.
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Notes
- 1.
The EFIGE data set does not provide information on exports to the two countries separately.
- 2.
According to the “broad” definition of family ownership adopted in this paper, which includes firms where the main shareholder has more than 30% of the capital. Using the narrower definition (firms that declared a “family ownership” structure) the share in our sample declines to 74%.
- 3.
The questionnaire does not allow us to distinguish exporters to China from exporters to India. In the text we sometimes refer to these two countries as emergent countries.
- 4.
The geographical destination of exports is recorded for 2008 only. Accordingly, when we analyse the destination-specific experience of exporters we focus only on that year.
- 5.
The project sought to study the relationship between exports and productivity by reducing methodological and statistical differences. Some 40 researchers took part, conducting analyses of firm-level data from 14 countries (Austria, Belgium, Chile, China, Colombia, Denmark, France, Germany, Ireland, Italy, Slovenia, Spain, Sweden and the United Kingdom). Davide Castellani of the University of Perugia, Francesco Serti and Chiara Tomasi of the Scuola Superiore Sant’Anna in Pisa participated for Italy.
- 6.
- 7.
- 8.
In all the regressions we only report results for one measure of skills, the share of graduate employees. The results are not affected if we use the share of managers and white collars of total employment instead.
- 9.
This might also explain why innovation significantly influences not only the probability of being an exporter but also the amount exported in the previous regressions, where the population is given by all firms, including non-exporters.
- 10.
As mentioned before, other reasons why family ownership may hinder exports include limited delegation in decision making, dynastic management, aversion to a dilution of assets and control.
- 11.
For more information about the sampling construction, the collection of data, the sample characteristics and the weighting procedure, see Barba et al. (2010).
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Appendices
Appendix A: Data Description
We use the firm-level EU-EFIGE/Bruegel-UniCredit dataset. The data have been collected within the EFIGE project – (European Firms in a Global Economy: internal policies for external competitiveness) supported by the Directorate General Research of the European Commission through its FP7 program. GFK Eurisko dealt with the collection of data via CATI (Computer Assisted Telephone Interview) and CAWI (Computer Assisted Web Interview). This database collects information for seven European Countries – Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom – and provides insights into the following firm characteristics and activities: structure; workforce; investment, technological innovation and R&D; internationalisation; finance; market and pricing.
The sampling design has followed a stratification by sector and firm size; it covers firms with at least ten employees. All elaborations and regressions on data have been computed using weights to report the sample to the national firm universe.
We define as “family firm” all firms replying “yes” to the question “Is your firm directly or indirectly controlled by an individual or family-owned entity?” and firms declaring that at least 30% of their capital is held by an individual/group of individuals (wide-definition).
In order to have a proxy for the exporters, we consider the replies to the following two questions: “has the firm sold abroad some or all of its own products/services in 2008?” and “before 2008, has the firm exported any of its products?”. A firm is termed “exporter” if it replies “yes, directly from the home country” to the first question and “regularly/always” or “sometimes” to the second. We felt that just using the first question to define exporters might exclude firms that only temporarily stopped selling abroad, given that in 2008 there was an extraordinary contraction in international trade.
When we consider exporters to China and India, we have to rely solely on export activity in 2008, since the breakup by geographical destination of international activity is available for that year only.Footnote 11
The survey data have been matched with balance-sheet data from Amadeus (Bureau van Dyck) to construct a measure of labour productivity.
Appendix B: Tables and Graphs
China’s weight in total export of each country/group
China’s weight in total export of each country/group
Percentage of exporting firms by destination market (Source: Based on EU-EFIGE/Bruegel-UniCredit dataset)
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Navaretti, G.B., Bugamelli, M., Cristadoro, R., Maggioni, D. (2012). Are Firms Exporting to China and India Different from Other Exporters?. In: Gomel, G., Marconi, D., Musu, I., Quintieri, B. (eds) The Chinese Economy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-28638-4_12
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