2018
DOI: 10.1111/twec.12630
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Trade, productivity and profitability: On profit levels and profit margins

Abstract: Do firms engaging in international trade have higher or lower profit margins? It is well established that more productive firms engage in trading activities and as a result have higher profit levels. We use two theoretical models (the Melitz model and the Egger–Kreickemeier model) to clarify the relationship between productivity, trade activity, and profit margins and derive three hypotheses: (I) profit margins rise as productivity rises for domestic firms; (II) profit margins rise as productivity rises for tr… Show more

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Cited by 9 publications
(6 citation statements)
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“…Only recent studies have dealt with the relationship between presence in international markets and profitability. This gap does not seem logical since the survival of the company is largely linked to its profitability (Alarussi & Alhaderi, 2018;van den Berg et al, 2018;Wagner, 2012aWagner, , 2014. It seems normal to accept a positive relationship between international trade and profitability.…”
Section: Presence In International Marketsmentioning
confidence: 99%
“…Only recent studies have dealt with the relationship between presence in international markets and profitability. This gap does not seem logical since the survival of the company is largely linked to its profitability (Alarussi & Alhaderi, 2018;van den Berg et al, 2018;Wagner, 2012aWagner, , 2014. It seems normal to accept a positive relationship between international trade and profitability.…”
Section: Presence In International Marketsmentioning
confidence: 99%
“…Comparing import sources showed that intermediate costs from higher-income countries were more beneficial and facilitated exports to more demanding and profitable G7 markets. Van den Berg et al (2018) examined the link between imports and firms' productivity, where productivity is an intermediate factor in importexport relations. Scientists note that the connection between the company's import and export performance has not yet been fully explored (Van den Berg et al 2018).…”
Section: Literature Analysismentioning
confidence: 99%
“…Van den Berg et al (2018) examined the link between imports and firms' productivity, where productivity is an intermediate factor in importexport relations. Scientists note that the connection between the company's import and export performance has not yet been fully explored (Van den Berg et al 2018). Wagner (2012) research shows that importing firms are more productive than non-importing because importers themselves enter international and global supply markets and buy higher quality intermediate products at lower costs, which contributes to the competitiveness of their products.…”
Section: Literature Analysismentioning
confidence: 99%
“…(Otter and Halasi, 2018) Effective receivables management is one of the possible tools against insolvency, payment incompetence or payment unwillingness on the part of the customer, which lead to the emergence of secondary insolvency in the company providing trade credits. (Kljucnikov et al., 2017;Salamon and Mesko, 2016) We distinguish three basic parts of receivables management: (Novytska, 2012)  Prevention  Monitoring  Recovery Some of the authors (Cornille et al, 2019;Soto-Scosta et al, 2016;Van Den Berg et al, 2018) state that the first partprevention is the most important. This phase helps to prevent the emergence of difficult, badly recoverable, or bad debts and helps to save costs related to these types of receivables.…”
Section: Introductionmentioning
confidence: 99%