To calculate the concentration of Spanish exports, we have used the export transactions database, which is elaborated by the Customs and Excise Department of the Spanish Tax Agency. For each transaction, we know the firm’s identification code, the product according to the 8-digit Combined Nomenclature (CN) classificationFootnote 2, the destination of the export transaction, the free-on-board (FOB) value in euros of the transaction, and the exported quantity (in weight metric and/or units).Footnote 3 Every year, new CN8 codes are added to the classification and some CN codes are dropped. Since some sections of the paper compare data for different years, we use the Van Beveren et al. (2012) algorithm to create a consistent product classification over the period of analysis.Footnote 4 Using this database, we first analyze, how export concentration varies by the number of top firms. Second, we study whether concentration also occurs in export flows, where a flow is defined as a particular 8-digit product shipped to a particular destination. Finally, we analyze how sensitive concentration is to different product classifications.
Concentration of exports by firm
We begin by analyzing the concentration of exports by firm. Table 1 presents the concentration of exports for the top firm, and the top 5, top 50, top 200 and top 1000 firms over the 1997–2015 period. We use absolute numbers to identify top firms, rather than percentages (e.g. top 1% of exporters), because the number of exporters increases with the GDP (Fernandes et al. 2015).
In 2015, the top Spanish firm accounted for 3% of all exports. This firm exported 3725 times more than the average exporter, and almost 2 million times more than the median exporter. If we remove all the very small export operations (\(<6000\) euros)Footnote 5, the top Spanish firm exported 939 times more than the average exporter, and 10,354 times more than the median exporter.
The top 5 firms represented 10% of all exports, the top 50 accounted for almost one-third of all exports, the top 200 performed almost half of all exports, and the top 1000 were responsible for two-thirds of all exports. These figures suggest that the concentration of exports by firm is very high in Spain. If we removed the top 1000 firms, which only represented 0.7% of all exporting firms in 2015, 67% of all exports would vanish. Table 1 also shows that over the 1997–2015 period, there has been a moderate reduction in the concentration of exports by the top 5 firms. In contrast, the concentration of exports is similar for the top firm and the top 50 firms, and increases slightly for the top 200 and top 1000 firms.
Export concentration by firm is higher for goods than for services. Minondo (2013) shows that on average, over the 2001–2007 period, the top 1% of firms account for 49% of service exports, the top 5% of firms for 71% of service exports, and the top 10% of firms for 80% of service exports. For goods, the figures for the same period are 63, 85 and 93% for the top 1, 5 and 10%, respectively.
We want to compare the concentration of exports by firm with the concentration of total sales and employment. For that purpose, we combined the information from two databases: AEAT-Customs, which provides export sales data, and the Bureau Van Dick SABI database, which provides total sales and employment data. The latter database provides detailed financial and accounting records of Spanish firms that deposited their accounts in the Business Register. Unfortunately, we cannot match the AEAT-Customs and SABI databases, because we lack a common firm identifier. Hence, results should be interpreted with caution. Since the AEAT-Customs database only includes goods exports, to maximize comparability, we have selected exporters operating in the goods sectors (agriculture, industry, wholesale and retail) only from SABI. Table 2 presents the data for 2013, the last year available in SABI. Export concentration is similar to sales concentration (which includes sales in domestic and foreign markets), but higher than employment concentration. For example, whereas the top firm exported 3% of all Spanish exports, the firm with the largest number of employees only accounted for 1% of employment. Regarding the top 1000 firms, they made up more than two-thirds of exports, whereas they accounted for less than half of employment.Footnote 6
Concentration of exports by firm is not a particular characteristic of the Spanish economy. Table 3 compares the concentration of exports by firm in Spain with other countries. Since Spanish data is based on the universe of exporters, we only compared Spain with countries where the export concentration by firm was also calculated using data for all exporters. First, we compared Spain with the sample of 32 developing countries over the 2004–2008 period analyzed in Freund and Pierola (2015). They reported that the top exporter accounted for 14% of total exports, and the top 5 exporters for around 33% of total exports. The figures for Spain are 3 and 10%, respectively. These figures show that export concentration was much larger in developing countries than in Spain. The next rows present data for three European countries in 2003: Belgium, France and Norway, as calculated by Mayer and Ottaviano (2008).Footnote 7 They provide data for the top 1, 5 and 10% of exporters. To facilitate comparisons, we also calculated these percentages for Spain. The top 1% of firms held 72% of all exports in Spain, 48% in Belgium, 68% in France and 53% in Norway. The top 5% of exporters accounted for 92% of total exports in Spain, 73% in Belgium, 88% in France and 81% in Norway. Finally, the top 10% of exporters held 97% of total exports in Spain, 84% in Belgium, 94% in France and 91% in Norway. These figures point to the fact that the concentration of exports in Spain was similar to that found in a large developed country, such as France. This conclusion is confirmed in the last row, which presents US data for 2000, as calculated by Bernard et al. (2009). They reported that the top 1% of firms account for 81% of US exports, the top 5% of firms for 93% of total exports and the top 10% of firms for 96% of total exports. To sum up, the concentration of exports by firm in Spain is much lower than in developing countries, and similar to that found in other large developed countries.Footnote 8
Figure 1 presents the distribution of exports from the top 1000 firms in 2015. We rank the top exporting firm as first in the ranking. The figure shows that exports drop dramatically as we descend in the ranking. Using the methodology proposed by Gabaix and Ibragimov (2011), we tested whether a Pareto distribution fits the distribution of exports in the top 1000 Spanish firms. The regression concludes that 99.5% of the differences in the (log) rank of firms is explained by the (log) exports. This result confirms that a Pareto distribution fits the distribution of exports in the top 1000 exporters very well.Footnote 9
To finish this first set of analyses, we investigated the differences between the top 1000 firms and the rest of exporters. As shown in Table 4, superstars export more products to more destinations than ordinary firms. In particular, the median superstar exports to 30 different destinations, whereas the median ordinary firm only exports to one destination. However, there are superstars that only export to one destination, and there are a few ordinary firms that export to many destinations. Among the superstars, the maximum number of destinations is 141.
Differences between superstars and ordinary exporters are also salient regarding products. Among the superstars, the median firm exported 21 products in 2015, whereas the median ordinary firm exported only one. As before, we observe large differences among firms in each group. Among superstars, there are firms that export up to 1946 products and firms that export only one product. Among ordinary firms, while most firms export only one product, there is a firm that exports up to 1420 different products.
Zooming in on concentration
The Customs database provides the export value by firm, product and destination. This allows us to zoom in on the concentration of exports. In particular, we want to analyze how the concentration of exports differs when we zoom in from exports by firm to exports by firm-destination, exports by firm-product and exports by firm-destination-product. We denote these combinations as export flows. Figure 2 presents the results of the zoom-in exercises. As a benchmark, we have represented the accumulated percentage of exports up to the top 1000 firms (solid black line). This line reproduces the figures presented in Table 1 for 2015.
The top firm-product dyad represents 1.1% of all Spanish exports, the top firm-destination dyad includes 1.0% of all exports, and the top firm-destination-product triad accounts for 0.7% of all exports. This compares to the 3% of all Spanish exports made by the top Spanish firm. Although the zoom-in process reduces the concentration of exports, it is remarkable that the top firm-destination-product triad still represents almost 1% of all Spanish exports.Footnote 10
As shown in Fig. 2, the absolute difference in concentration between firms and our zoom-in categories widens as we increase the number of firms that are included in the set of top firms. However, the concentration of exports in the firm-product dyads, firm-destination dyads and firm-destination-product triads remains high. For example, the top 1000 firm-product dyads represent more than 51% of Spanish exports, compared to 67% for the top 1000 firms. For the firm-destination dyad, the figure is 43% and for the firm-destination-product triad it is 33%. These results suggest that exports are not only concentrated by firms, but also by destinations and products within each firm. Figure 4 shows the concentration of exports by the different categories using data for 1997. The results do not change.
Concentration across product classifications
In this subsection, we analyze whether the concentration of exports by firm is homogeneous across products. We have performed the analysis for three different product classifications. First, we used the 8-digit CN classification, consistent throughout time, which includes 7650 products. Second, we aggregated exports at the Harmonized System 2-digit level, which includes 96 products, denoted as chapters.Footnote 11 Finally, we aggregated exports at the section level, which constitutes the first level of disaggregation of the Harmonized System classification, and includes 21 categories. The latter two classifications are also used in the next section, where we analyze the influence of top firms in Spanish export specialization. To perform these analyses, we use data for the year 2015, and calculate the share of the top five firms in each product’s total exports.Footnote 12
Figure 3 presents the histograms for the three different product disaggregations. In the CN classification, panel (a), the top five firms account for almost 100% of exports in the majority of products. In particular, in the median product, the share of the top five firms in total exports is 91%. In panel (b), we define products at the chapter level. Since products are much more aggregated in this classification, the share of the top five firms in total exports is reduced significantly. In the median chapter, the share of the top five firms is 38%. We also observe a larger heterogeneity across chapters. For example, the share of chapters where the top five firms account for between 10 and 20% of exports is similar to the share of chapters where the top five firms account for between 40 and 50% of exports. The concentration is even lower for sections (panel (c)), where the top five firms account for 25% of exports in the median section.