Abstract
This paper uses a tailor-made new data set of 7,112,614 observations for export quality (measured by the unit value of exports) at the firm-product-destination level for German and the reporting year 2011. Data are from 119,280 firms that exported 4986 products (recorded at the HS6-level) in 1,632,731 firm-product combinations to 174 countries. The paper investigates for the first time the link between the quality of firms’ exports and the distance to destination countries for Germany. It is shown that, in line with theory, the quality of exported goods and distance to destination countries are statistically positively correlated.
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Notes
According to the World Trade Organization’s World Trade Report 2012 Germany hold rank 3 among the exporters of goods in 2011 with a share of 8.1 %; see World Trade Organization (2012, p. 30).
See the recent report by the Federal Ministry of Economics and Energy (Bundesministerium für Wirtschaft und Energie (2014)).
Other aspects of the quality of exports by German firms discussed in recent papers are the role of high-quality goods for the international competitiveness of low-productive exporters (Wagner 2014b), the relation between high-quality inputs and high-quality exports (Wagner 2014c) and the links between firm profitability and quality of exports (Wagner 2014d).
Note that in Germany information on international trade in services is compiled by the German Central Bank (Deutsche Bundesbank) to build the balance of services trade (Dienstleistungsbilanz).
Note that firms with a value of exports to and imports from EU-countries that did not exceed 400,000 Euro in the previous year or in the current year do not have to report to the statistic on intra-EU trade. For trade with firms from non-member countries all transactions that exceed 1,000 Euro (or have a weight that exceeds 1000 kg) are registered. For details see Statistisches Bundesamt, Qualitätsbericht Außenhandel, Januar 2011.
Transaction level data of this type have been used in numerous empirical studies on international trade for many countries in recent years; see Wagner (2016) for a survey.
Note that this identifier is missing for several transactions for various reasons including traders that do not have a (German) tax identification number; further details were not revealed to me.
Transactions without a firm identifier (see footnote 7) and with a weight below 0.5 kg (that is reported as zero in the original data, and for which a unit value could not be calculated) are excluded. Furthermore, information on some of the country characteristics is missing for some destination countries.
Descriptive statistics are reported in logs (except for the dummy variables) because the variables enter the empirical models in logs, following the usual specification of gravity-models. Note that the minimum and maximum values of the variables cannot be reported because they (may) refer to a single firm and, therefore, this information is confidential. For the distance to destination countries, however, these values are known.
This holds in models without the control variables, too, where the estimated regression coefficients for the distance-variable are of the same size in models 1, 2 and 3 from Table 2, while the coefficient in model 4 is 0.0226 (which is about double the size of the model with controls). Given that the control variables serve as controls only in the empirical models we do not comment on the results for the estimated regression coefficients.
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Acknowledgments
This is a completely revised version of a working paper published in July 2014 (see Wagner 2014a). I thank an anonymous referee for helpful comments. All computations were done at the Research Data Centre of the Federal Statistical Office in Wiesbaden. I thank Melanie Scheller for preparing the transaction level data for exports and for checking the output of my do-files for the violation of privacy. The micro data used are strictly confidential but not exclusive; see http://www.forschungsdatenzentrum.de/datenzugang.asp for information on how to access the data. To facilitate replications the Stata do-file used is available from the author on request.
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Wagner, J. Quality of Firms’ Exports and Distance to Destination Countries: First Evidence from Germany. Open Econ Rev 27, 811–818 (2016). https://doi.org/10.1007/s11079-016-9395-y
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DOI: https://doi.org/10.1007/s11079-016-9395-y