Open Economies Review

, Volume 23, Issue 5, pp 747–765 | Cite as

Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises

  • Joachim WagnerEmail author
Research Article


This paper documents for the first time the relationship between profitability and three types of international trade activities–exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods, that merge information from surveys performed by the Statistical Offices and administrative data collected by the Tax Authorities. Descriptive statistics and regression analysis (with and without controlling for unobserved firm heterogeneity and the role of outliers) point to the absence of any statistically significant and economically large effects of trade activities on profits. This demonstrates that any productivity advantages of trading firms are eaten up by extra costs related to selling and buying on foreign markets.


Exports Imports Profitability 

JEL classification



  1. Amendolagine V, Capolupo R, Petragallo N (2008) Export status and performance in a panel of Italian manufacturing firms. Università degli Studi Bari Dipartomento di Scienze Economiche S.E.R.I.E.S Working Paper No. 27Google Scholar
  2. Bernard AB, Jensen JB (1995) Exporters, jobs, and wages in U.S. manufacturing: 1976–1987. Brookings Paper Econ Activ, Microeconomics 1:67–119CrossRefGoogle Scholar
  3. Bramati MC, Croux C (2007) Robust Estimators for the Fixed Effects Panel Data Model. Econometrics Journal 10(3):521-540Google Scholar
  4. Buchinsky M (1994) Changes in the U.S. wage structure 1963–1987: application of quantile regression. Econometrica 62(2):405–458CrossRefGoogle Scholar
  5. Conover WJ (1999) Practical nonparametric statistics, 3rd edn. Wiley, New York etcGoogle Scholar
  6. Delgado MA, Farinas JC, Ruano S (2002) Firm productivity and export markets: a non-parametric approach. J Int Econ 57(2):397–422CrossRefGoogle Scholar
  7. European Commission (1998) Commission regulation (EC) No. 2700/98 concerning the definitions of characteristics for structural business statistics, Brussels. Offic J Eur Communities L344, 18/12/1998, 49–80Google Scholar
  8. Foster L, Haltiwanger J, Syverson C (2008) Reallocation, firm turnover, and efficiency: selection on productivity or profitability? Am Econ Rev 98(1):394–425CrossRefGoogle Scholar
  9. Fritsch M, Görzig B, Hennchen O, Stephan A (2004) Cost structure surveys for Germany. J Appl Soc Sci Stud 124(4):557–566Google Scholar
  10. Fryges H, Wagner J (2010) Exports and profitability: first evidence for German manufacturing firms. World Econ 33(3):399–423CrossRefGoogle Scholar
  11. Grazzi M (2009) Trade and profitability: is there an export premium? evidence from Italian manufacturing firms. LEM Working Paper Series 2009/16, OctoberGoogle Scholar
  12. Greenaway D, Kneller R (2007) Firm heterogeneity, exporting and foreign direct investment. Econ J 117(February):F134–F161CrossRefGoogle Scholar
  13. International Study Group on Exports and Productivity (ISGEP) (2008) Understanding cross-country differences in exporter premia: comparable evidence for 14 countries. Rev World Econ 144(4):596–635CrossRefGoogle Scholar
  14. Konold M (2007) New possibilities for economic research through integration of establishment-level panel data of German official statistics. J Appl Soc Sci Stud 127(2):321–334Google Scholar
  15. Kox HLM, Rojas-Romagosa H (2010) Exports and productivity selection effects for Dutch firms. De Economist 158(3):295–322CrossRefGoogle Scholar
  16. Rousseeuw PJ, Leroy AM (1987) Robust regression and outlier detection. Wiley, New York etcCrossRefGoogle Scholar
  17. Schank T, Schnabel C, Wagner J (2007) Do exporters really pay higher wages? first evidence from German linked employer-employee data. J Int Econ 72(1):52–74CrossRefGoogle Scholar
  18. Schank T, Schnabel C, Wagner J (2010) Higher wages in exporting firms: self-selection, export effect, or both? first evidence from linked employer-employee data. Rev World Econ 146(2):303–322CrossRefGoogle Scholar
  19. Schmalensee R (1989) Inter-industry studies of structure and performance. In: Schmalensee R, Willig RD (eds) Handbook of industrial organization, volume II. North-Holland, Amsterdam etc, pp 951–1009CrossRefGoogle Scholar
  20. Temouri Y, Vogel A, Wagner J (2011) Self-selection into export markets by business services firms–evidence from France, Germany and the United Kingdom. Aston Business School and Leuphana University Lueneburg, Mimeo, MarchGoogle Scholar
  21. Verardi V, Croux C (2009) Robust regression in Stata. Stata J 9(3):439–453Google Scholar
  22. Verardi V, Wagner J (2011) Robust estimation of linear fixed effects panel data models with an application to the exporter productivity premium. Jahrb Natl Stat 231(4):546–557Google Scholar
  23. Vogel A, Dittrich S (2008) The German turnover tax statistics panel. J Appl Soc Sci Stud 128(4):661–670Google Scholar
  24. Vogel A, Wagner J (2010a) Higher productivity in importing German manufacturing firms: self-selection, learning from importing, or both? Rev World Econ 145(4):641–665CrossRefGoogle Scholar
  25. Vogel A, Wagner J (2010b) Exports and profitability–first evidence for German business services enterprises. Appl Econ Q 56(1):7–30CrossRefGoogle Scholar
  26. Vogel A, Wagner J, Burg F, Dittrich S (2008) Zur Dynamik der export- und importbeteiligung deutscher Industrieunternehmen. Empirische Befunde aus dem Umsatzsteuerpanel 2001 bis 2006. Wirtschaft und Statistik 11:1109–1116Google Scholar
  27. Wagner J (2007) Exports and productivity: a survey of the evidence from firm-level data. World Econ 30(1):60–82CrossRefGoogle Scholar
  28. Wagner J (2008a) A note why more West than East German firms export. Int Econ Econ Pol 5(4):363–370CrossRefGoogle Scholar
  29. Wagner J (2008b) Export entry, export exit and productivity in German manufacturing industries. Int J Econ Bus 15(2):169–180CrossRefGoogle Scholar
  30. Wagner J (2011) International trade and firm performance: a survey of empirical studies since 2006. University of Lueneburg Working Papers in Economics 210, August (forthcoming, Review of World Economics)Google Scholar
  31. Zühlke S, Zwick M, Scharnhorst S, Wende T (2004) The research data centres of the Federal Statistical Office and the statistical offices of the Länder. J Appl Soc Sci Stud 124(4):567–578Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Leuphana University, Lueneburg and IZABonnGermany
  2. 2.Institute of EconomicsLeuphana University LueneburgLueneburgGermany

Personalised recommendations