Review of World Economics

, Volume 152, Issue 1, pp 19–41 | Cite as

Services versus goods trade: a firm-level comparison

  • Andrea AriuEmail author
Original Paper


Using transaction data from Belgium, we provide a descriptive comparison of trade in goods and trade in services at the firm level. From a static perspective, we find that firms trading services are fewer and export and import smaller values than those trading goods. This is because they trade fewer products, with less countries, making fewer transactions and these gaps are only partially counterbalanced by larger transaction values. Instead, firms trading both services and goods are even rarer, but they account for a substantial share of total trade. In the time dimension, services traders experience higher entry and exit rates and a lower survival probability. However, the surviving firms grow more rapidly than those trading goods thanks to an increase in the number of transactions per product-market. Finally, we observe that firms that trade only services add also goods in their export and import basket and vice versa. This is a further important growth channel for firms in international markets.


Trade in services Trade in goods Dynamics 

JEL Classification

F10 F14 L80 



This work was carried out while I was a Ph.D. at IRES, Univeristé catholique de Louvain and an intern at the National Bank of Belgium, I thank for the hospitality and the support provided. All views expressed in this paper, as well as the errors, are my own solely and do not necessarily reflect the views of the National Bank of Belgium. I thank Chiara Farronato, Kalina Manova, Giordano Mion and Florian Mayneris for their helpful comments, as well as the editor, Harmen Lehment and two anonymous referees.


  1. Albornoz, F., Pardo, H. F. C., Corcos, G., & Ornelas, E. (2012). Sequential exporting. Journal of International Economics, 88(1), 17–31.CrossRefGoogle Scholar
  2. Alessandria, G., Kaboski, J. P., & Midrigan, V. (2010). Inventories, lumpy trade, and large devaluations. American Economic Review, 100(5), 2304–2339.CrossRefGoogle Scholar
  3. Araujo, L., Mion, G., & Ornelas, E. (2012). Institutions and export dynamics. (CEPR discussion paper 8809). London: Centre for Economic Policy Research.Google Scholar
  4. Ariu, A., & Mion, G. (2012). Trade in services and occupational tasks: An empirical investigation. (CEPR working paper 8761). London: Centre for Economic Policy Research.Google Scholar
  5. Behrens, K., Corcos, G., & Mion, G. (2013). Trade crisis? What trade crisis? The Review of Economics and Statistics, 95(2), 702–709.CrossRefGoogle Scholar
  6. Bernard, A. B., & Jensen, J. B. (1999). Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47, 1–25.CrossRefGoogle Scholar
  7. Bernard, A. B., Jensen, J. B., Redding, S. J., & Shott, P. K. (2009). The margins of US trade. American Economic Review, 99(2), 487–493.CrossRefGoogle Scholar
  8. Bernard, A. B., Van Beveren, I., & Vandenbussche, H. (2010). Multi-product exporters, carry-along trade and the margins of trade. (Research series 201010-203). Brussels: National Bank of Belgium.Google Scholar
  9. Bernard, A. B., Redding, J. B., & Schott, P. K. (2011). Multiproduct firms and trade liberalization. The Quarterly Journal of Economics, 126(3), 1271–1318.CrossRefGoogle Scholar
  10. Bernard, A. B., Jensen, J. B., Redding, S. J., & Schott, P. K. (2012). The empirics of firm heterogeneity and international trade. Annual Review of Economics, 4(1), 283–313.CrossRefGoogle Scholar
  11. Bernard, A. B., Moxnes, A., & Ulltveit-Moe, K. H. (2013). Two-sided heterogeneity and trade. (CEPR discussion papers 9681). London: Centre for Economic Policy Research.Google Scholar
  12. Breinlich, H., & Criscuolo, C. (2011). International trade in services: A portrait of importers and exporters. Journal of International Economics, 84(2), 188–206.CrossRefGoogle Scholar
  13. Buono, I., Fadinger, H., & Berger, S. (2008). The micro dynamics of exporting: Evidence from French firms. (MPRA paper 12940). Munich: University Library of Munich.Google Scholar
  14. Carballo, J., Ottaviano, G., & Volpe, Martincus C. (2013). The buyer margins of firms’ exports. (CEPR discussion paper 9584). London: Centre for Economic Policy Research.Google Scholar
  15. Duprez, C. (2011). International trade in services. A growing contribution to Belgiums current balance. Economic Review, III, 3–68.Google Scholar
  16. Eaton, J., Kortum, S., & Kramarz, F. (2011). An anatomy of international trade: Evidence from French firms. Econometrica, 79(5), 1453–1498.CrossRefGoogle Scholar
  17. Eaton, J., Eslava, M., Krizan, C., Jinkins, D., & Tybout, J. (2014). A search and learning model of export dynamics. State College: Penn State University.Google Scholar
  18. Federico S. & Tosti E. (2012). Exporters and importers of services: Firm-level evidence on Italy. (Economic working papers 877). Rome: Bank of Italy.Google Scholar
  19. Francois, J. J., & Hoeckman, B. (2010). Services trade and policy. Journal of Economic Literature, 48(3), 642–692.CrossRefGoogle Scholar
  20. Freund, C., & Pierola, M. D. (2010). Export entrepreneurs: evidence from Peru. (Policy research working paper 5407). Washington, DC: World Bank.Google Scholar
  21. Gaulier, G., Mirza, D., & Milet, E. (2011). French firms in international trade in services. Economie et Statistique, 435–436, 125–147.Google Scholar
  22. Hornok, C., & Koren, M. (2015). Administrative barriers to trade. Journal of International Economics, 96(1), 110–122.CrossRefGoogle Scholar
  23. International Monetary Fund (1993). Balance of payments manual (5th ed.). Washington, DC: IMF.Google Scholar
  24. Kelle, M., & Kleinert, J. (2010). German firms in service trade. Applied Economics Quarterly, 56(1), 51–72.CrossRefGoogle Scholar
  25. Lawless, M. (2009). Firm export dynamics and the geography of trade. Journal of International Economics, 77(2), 245–254.CrossRefGoogle Scholar
  26. Mayer, T., & Ottaviano, G. I. P. (2007). The happy few: The internationalisation of European firms (Vol. 3). Brussels: Bruegel Blueprint Series.Google Scholar
  27. Mayer, T., Melitz, M. J., & Ottaviano, G. I. P. (2014). Market size, competition, and the product mix of exporters. American Economic Review, 104(2), 495–536.CrossRefGoogle Scholar
  28. Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.CrossRefGoogle Scholar
  29. Mion, G., & Zhu, L. (2013). Import competition from and outsourcing to China: A curse or blessing for firms? Journal of International Economics, 89(1), 202–215.CrossRefGoogle Scholar
  30. Muûls, M., & Pisu, M. (2009). Imports and exports at the level of the firm: Evidence from Belgium. The World Economy, 32(5), 692–734.CrossRefGoogle Scholar
  31. Walter, P., & Dell’mour, R. (2010). Firm-level analysis of international trade in services. (IFC working papers No 4). Basel: Bank for International Settlements.Google Scholar

Copyright information

© Kiel Institute 2015

Authors and Affiliations

  1. 1.University of GenevaGenevaSwitzerland
  2. 2.McDonough Business SchoolGeorgetown UniversityWashingtonUSA
  3. 3.CRENOSCagliariItaly

Personalised recommendations