Review of World Economics

, Volume 153, Issue 2, pp 327–351 | Cite as

Explaining the size differences of exporter premia: theory and evidence

  • Ingo Geishecker
  • Philipp J. H. Schröder
  • Allan Sørensen
Original Paper
First Online:
  • 171 Downloads

Abstract

Two decades of research have established pronounced exporter productivity premia (EPP) and exporter size premia (ESP). Yet, we do not know why such exporter premia differ so widely in magnitude across countries or sectors? We take this question to the theory and to the data. We derive the sectoral EPP and ESP in a standard heterogeneous firms trade model and apply the insights from the model to guide our empirical investigation of detailed Danish firm-level data. We show that a significant share of the observed variation in EPP and ESP across sectors can be accounted for by sector differences in the underlying variation in productivity dispersion, variable trade costs, the ratio of fixed export costs to fixed costs of production, and the elasticity of demand.

Keywords

Intra-industry trade Exporter productivity Exporter size premium Firm-level data Heterogeneous firms 

JEL Classification

F12 F14 D24 O47 
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Notes

Acknowledgments

The paper benefited from the comments of Andrew Bernard, Gabriel Felbermayr, Benjamin Jung and Giammario Impullitti. The authors acknowledge financial support from the Tuborg Foundation.

Supplementary material

10290_2016_266_MOESM1_ESM.pdf (88 kb)
Supplementary material 1 (pdf 87 KB)
10290_2016_266_MOESM2_ESM.pdf (147 kb)
Supplementary material 2 (pdf 146 KB)
10290_2016_266_MOESM3_ESM.pdf (68 kb)
Supplementary material 3 (pdf 68 KB)
10290_2016_266_MOESM4_ESM.pdf (90 kb)
Supplementary material 4 (pdf 89 KB)

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Copyright information

© Kiel Institute 2016

Authors and Affiliations

  • Ingo Geishecker
    • 1
    • 2
  • Philipp J. H. Schröder
    • 2
    • 3
  • Allan Sørensen
    • 2
    • 3
  1. 1.Faculty of Business Administration and EconomicsEuropean University ViadrinaFrankfurt (Oder)Germany
  2. 2.Tuborg Research Centre for Globalisation and FirmsAarhusDenmark
  3. 3.Department of Economics and Business Economics, School of Business and Social SciencesAarhus UniversityAarhusDenmark

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