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Time zones and German exports: first evidence from firm-product level data

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Abstract

This paper uses a tailor-made new data set of 3,390,871 observations for German exports to non-EU countries at the firm-product-destination level in 2011 to investigate the link between the amount of firms’ exports and the difference in time zones between Germany and the destination countries. The results indicate that including firm and product level heterogeneity is important. When distance to destination countries is controlled for, time zones only decrease exports for smaller exporters and for intermediate goods. The quantity of exports declines with increasing time difference within a firm for a given product for exports to the West (where time difference to Germany is negative) but not the East.

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Notes

  1. For empirical studies with a focus on time-zone effects on services exports see Dettmer (2014) and Christen (2017), for foreign direct investment flows see Hattari and Rajan (2012) and Bahar (2018).

  2. For a comprehensive survey of empirical studies that use transaction level data at the firm-product-destination level see Wagner (2016).

  3. We focus on exports to non-EU countries because time zones arguably matter less inside the EU. Furthermore, policy made trade barriers do not matter inside the EU, and data on intra-EU trade are collected differently.

  4. This identifier is missing for less than 1% of all export transactions for various reasons including that exporters do not have a German tax identification number. Observations without a firm identifier were dropped from the sample that is used in the empirical investigation.

  5. For an empirical study based on the same data used here that estimates a standard gravity model for German exports without including information on the time-zone difference see Wagner (2017).

  6. A discussion of the gravity model and its relation to theoretical models of trade is far beyond the scope of this letter; see Head and Mayer (2014) for a comprehensive treatment. For a meta-analysis of 1467 distance effects estimated in 103 papers see Disdier and Head (2008).

  7. Note that the effect runs from time zone differences to exports of goods, and not vice versa, although there is (at least) one example for reverse causality. In 2011, Samoa and Tokelau changed time zones to align themselves more closely with their main trading partners, Australia and New Zealand (Bista and Tomasik 2015, p. 1335).

  8. For information on the regional distribution of German exports in 2011 see Statistisches Bundesamt, Statistisches Jahrbuch 2012, p. 413ff.

  9. Given that the control variables serve as controls only in the empirical models we do not comment on the results for the estimated regression coefficients.

  10. This estimated effect is of the same order of magnitude as the estimated effect of distance reported in Wagner (2017) from an empirical model that does not control for time-zone difference.

  11. For the conversion of the HS6 classification of goods used in the transaction data to the Basic Classes of Goods see United Nations (2002) Statistical Papers Series M No. 53, Rev. 4, p. 5ff. Details are available on request.

  12. I thank the associate editor and the referees for suggesting these robustness checks.

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Authors and Affiliations

  1. Leuphana University Lueneburg, Institute of Economics, PO Box 2440, 21314, Lueneburg, Germany

    Joachim Wagner

  2. CESIS, KTH, Stockholm, Sweden

    Joachim Wagner

Authors
  1. Joachim Wagner
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Correspondence to Joachim Wagner.

Additional information

All computations were done at the Research Data Centre of the Federal Statistical Office in Wiesbaden. I thank Melanie Scheller for preparing the transaction level data for exports and for checking the output of my do-files for the violation of privacy. The micro data used are strictly confidential but not exclusive; see http://www.forschungsdatenzentrum.de/datenzugang.asp for information on how to access the data. To facilitate replications the Stata do-file used is available from the author on request. I thank Lindsay Oldenski (the associate editor) and two anonymous referees for very helpful comments on earlier versions of this paper.

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Wagner, J. Time zones and German exports: first evidence from firm-product level data. Rev World Econ 155, 181–198 (2019). https://doi.org/10.1007/s10290-018-0330-8

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