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From Estimation Results to Stylized Facts Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms

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Abstract

Heterogeneous firms are at the heart of both the New New International Trade Theory and the Micro-econometrics of International Firm Activities. One important aim of micro-econometric studies is to uncover stylized facts that hold over space and time, and that can both inspire theoretical models that are based on “realistic” assumptions, and inform policy debates in an evidence-based way. Which results from the thousands of empirical estimates reported in the literature on the micro-econometrics of international firm activities do we consider as convincing? Based on my own experience from the last twenty years I use the opportunity of this paper to make twelve recommendations that, hopefully, will help to find the right way on the thorny road from estimation results to stylized facts. I will deal with the following topics: comparisons of means vs. comparisons of distributions; extremely different firms, or outliers; unobserved heterogeneity; simultaneous occurrence of differences across quantiles, outliers, and unobserved heterogeneity; heterogeneous effects of international firm activities on firm performance; replication; within-study replication by international research teams; meta-analysis; and talking to practitioners.

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Authors and Affiliations

  1. Leuphana University Lueneburg, and IZA, Bonn, Germany

    Joachim Wagner

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  1. Joachim Wagner
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Correspondence to Joachim Wagner.

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Many thanks to Vincenzo Verardi for his cooperation on the application of the robust estimator for fixed-effects models, to David Powell for his cooperation on the application of the quantile regression estimatior for fixed effects models, and to Nils Braakmann and Christian Pfeifer for helpful remarks on an earlier draft. Earlier versions were presented as an invited lecture at the DIME-ISGEP International Workshop on Firm Selection and Country Competitiveness in Nice-Cote-d’Azur in March 2010, as a keynote paper at the Sixth Danish International Economics Workshop, Aarhus, June 3–4, 2010, and as a keynote lecture at the international conference “Productivity and Internationalisation—A Micro-data approach”, The Hague, September 1–3, 2010. I thank participants and two referees for helpful comments. All remaining errors are mine.

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Wagner, J. From Estimation Results to Stylized Facts Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms. De Economist 159, 389–412 (2011). https://doi.org/10.1007/s10645-011-9167-4

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