Firm heterogeneity and aggregate business services exports: Micro evidence from Belgium, France, Germany and Spain

Abstract

This paper uses detailed micro data on services exports at the firm–destination–service level to analyse the role of firm heterogeneity in shaping aggregate services exports in Belgium, France, Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate services exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growth.

An account of the exporter wage gap: Wage structure and composition effects across the wage distribution

“…Previously, Baumgarten (2013), using the decomposition introduced by Juhn et al (1993), found a positive but moderate contribution of exporting companies to increasing wage inequality, predominantly within skill groups. 10 Lastly, the empirical evidence we have reviewed is largely restricted to the study of the manufacturing sector, and it ignores a set of well-documented facts, that is, the prominent role of trade in services (Ariu et al, 2019), the resilience of services to crises (Ariu, 2016) and the key role played by firm-level heterogeneity in services trade (Breinlich & Criscuolo, 2011;Loof, 2010). Services might possess unique attributes such as intangibility or inseparability, and this has some implications for trade.…”