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Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression

Author

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  • Joachim Wagner

    (Kiel Centre for Globalization, Leuphana Universität Lüneburg, Lüneburg, Germany)

Abstract

The use of digital technologies like artificial intelligence, robotics, or smart devices can be expected to go hand in hand with higher productivity and lower trade costs, and, therefore, to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union to shed further light on this issue by investigating the link between the digitalization intensity of a firm and extensive margins of exports. We use a new machine-learning based regression method, Kernel-Regularized Least Squares (KRLS), which effectively handles non-linear relationships in models and does not impose any restrictive assumptions for the functional form of the relation between margins of exports, digitalization intensity, and any control variables. We find that firms which use more digital technologies do more often export, do more often export to various destinations all over the world, and do export to more different destinations.

Suggested Citation

  • Joachim Wagner, 2025. "Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression," Economic Analysis Letters, Anser Press, vol. 4(1), pages 22-29, March.
    • Handle: RePEc:bba:j00004:v:4:y:2025:i:1:p:22-29:d:379
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    References listed on IDEAS

    as
    1. Joachim Wagner, 2024. "Cloud Computing and Extensive Margins of Exports: Evidence for Manufacturing Firms from 27 EU Countries," Journal of Information Economics, Anser Press, vol. 2(1), pages 102-111, March.
    2. Wagner, Joachim, 2024. "Estimation of empirical models for margins of exports with unknown nonlinear functional forms: A Kernel-Regularized Least Squares (KRLS) approach," KCG Working Papers 32, Kiel Centre for Globalization (KCG).
    3. Joachim Wagner, 2024. "Cloud Computing and Extensive Margins of Exports - Evidence for Manufacturing Firms from 27 EU Countries," Working Paper Series in Economics 427, University of Lüneburg, Institute of Economics.
    4. Wagner, Joachim, 2024. "Cloud computing and extensive margins of exports: Evidence for manufacturing firms from 27 EU countries," KCG Working Papers 34, Kiel Centre for Globalization (KCG).
    5. Joachim Wagner, 2024. "Estimation of empirical models for margins of exports with unknown non-linear functional forms: A Kernel-Regularized Least Squares (KRLS) approach Evidence from eight European countries," Working Paper Series in Economics 424, University of Lüneburg, Institute of Economics.
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