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Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises

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  • Wagner, Joachim

    (Leuphana University Lüneburg)

Abstract

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.

Suggested Citation

  • Wagner, Joachim, 2011. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," IZA Discussion Papers 5766, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp5766
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    References listed on IDEAS

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    10. Temouri, Yama & Vogel, Alexander & Wagner, Joachim, 2013. "Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 146-158.
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    More about this item

    Keywords

    profitability; imports; exports;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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