Small Open Economy Firms in International Trade: Evidence from Danish Transactions-Level Data

TY - UNPB

T1 - Small Open Economy Firms in International Trade

T2 - Evidence from Danish Transactions-Level Data

AU - Eriksson, Tor Viking

AU - Smeets, Valérie

AU - Warzynski, Frederic

PY - 2009

Y1 - 2009

N2 - In this paper, we use a rich dataset disaggregating imports and exports decisions by product and origin/destination of all Danish companies for the period 1993-2003 to provide key elements in characterizing Danish firms in international trade. Most evidence to date emanates from the U.S. or developing economies like Columbia or Mexico. Benchmarking on these studies, we find some similarities but also differences which we think are representative of European-type, small open economies. We find that Danish exporters make up a fairly small fraction of the total of firms, but that this fraction is higher than in e.g., the U.S. Firms engaged in exporting have the same positive performance characteristics - size, capital and skilled labour intensity, labour as well as total factor productivity, and wages - found in also in previous studies. But most exporter premia are significantly larger in Denmark than in the U.S. There are few traces of the European Union's Single Market Program and the adoption the Euro in 1998. We observe no impact of these changes on the number of exporters, but some signs of impacts on the number of products and export destination countries. Finally, we find that trade is positively related to productivity of firms. The association between productivity and the firm's imports of intermediate goods is particularly strong.

AB - In this paper, we use a rich dataset disaggregating imports and exports decisions by product and origin/destination of all Danish companies for the period 1993-2003 to provide key elements in characterizing Danish firms in international trade. Most evidence to date emanates from the U.S. or developing economies like Columbia or Mexico. Benchmarking on these studies, we find some similarities but also differences which we think are representative of European-type, small open economies. We find that Danish exporters make up a fairly small fraction of the total of firms, but that this fraction is higher than in e.g., the U.S. Firms engaged in exporting have the same positive performance characteristics - size, capital and skilled labour intensity, labour as well as total factor productivity, and wages - found in also in previous studies. But most exporter premia are significantly larger in Denmark than in the U.S. There are few traces of the European Union's Single Market Program and the adoption the Euro in 1998. We observe no impact of these changes on the number of exporters, but some signs of impacts on the number of products and export destination countries. Finally, we find that trade is positively related to productivity of firms. The association between productivity and the firm's imports of intermediate goods is particularly strong.

KW - Exporters

KW - Exporter premium

KW - Firm heterogeneity

M3 - Working paper

SN - 9788778823861

BT - Small Open Economy Firms in International Trade

PB - Aarhus School of Business

CY - Aarhus

ER -