, Volume 46, Issue 1, pp 151–175 | Cite as

Exports of firms and diversity: an empirical assessment for Germany

  • Stephan BrunowEmail author
  • Luise Pestel
  • Mark Partridge
Original Paper


The international trade literature highlights the importance of firm productivity and economies of scale on the firm’s international export success. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to related firms and they gain from knowledge spillovers and other positive externalities. They may also benefit from a potentially large supply of diverse workers that possess distinct knowledge and problem-solving skills. In such environments, firms may be more prone to export. In this paper, we employ a comprehensive German data set that combines survey and administrative data. We ask whether German firms (i.e., establishments) export more as a result of localization and urbanization externalities, and labor market pooling associated with workforce diversity, while controlling for a variety of establishment characteristics. Using a fractional response model, we provide evidence that manufacturers and smaller establishments benefit more from externalities and especially from knowledge spillovers. There is less evidence supporting the benefit of workforce diversity; however, that factor may be associated with between-establishment variation.


Export behavior Firms Agglomeration economies Cultural Workforce diversity 

JEL Classification

D 22 F 14 J 24 M 14 R12 


  1. Aitken B, Hanson GH, Harrison AE (1997) Spillovers, foreign investment, and export behavior. J Int Econ 43(1–2):103–132Google Scholar
  2. Altomonte C, Aquilante T, Békés G, Ottaviano GIP (2003) Internationalization and innovation of firms: evidence and policy. Econ Policy 28:663–700Google Scholar
  3. Antonietti R, Cainelli G (2011) The role of spatial agglomeration in a structural model of innovation, productivity and export: a firm-level analysis. Ann Reg Sci 46(3):577–600Google Scholar
  4. Audretsch DB, Dohse D, Niebuhr A (2010) Cultural diversity and entrepreneurship: a regional analysis for Germany. Ann Reg Sci 45(1):55–85Google Scholar
  5. Autor DH, Levy F, Murnane RJ (2003) The skill content of recent technological change: an empirical exploration. Q J Econ 118(4):1279–1333Google Scholar
  6. Barrios S, Görg H, Strobl E (2003) Explaining firms’ export behaviour: R&D, spillovers and the destination market. Oxford Bull Econ Stat 65(4):475–496Google Scholar
  7. Basile R (2001) Export behaviour of Italian manufacturing firms over the nineties: the role of innovation. Res Pol 30(8):1185–1201Google Scholar
  8. BIBB und IAB (1998/99): Bundesinstitut für Berufsbildung und Institut für Arbeitsmarkt und Berufsforschung,
  9. Brunow S, Grünwald L (2015) Exports, agglomeration and workforce diversity: an empirical assessment for German establishments, IAB-Discussion Paper, No. 3/2015, Nuremberg/GermanyGoogle Scholar
  10. Brunow S, Blien U (2014) Effects of cultural diversity on individual establishments. Int J Manpow 35(1/2):166–186Google Scholar
  11. Brunow S, Hirte G (2009) The age pattern of human capital and regional productivity: a spatial econometric study on German regions. Papers Reg Sci 88(4):799–823Google Scholar
  12. Brunow S, Miersch V (2015) Innovation capacity, workforce diversity and intra-industrial externalities: a study of German establishments. In: Kourtit K, Nijkamp P, Stough RR (eds) The rise of the city. Spatial dynamics in the urban century. Elgar, London, pp 188–222Google Scholar
  13. Cameron AC, Trivedi PK (2009) Microeconometrics using Stata. Stata Press, USAGoogle Scholar
  14. Card D (2005) Is the new immigration really so bad? Econ J 115(507):300–323Google Scholar
  15. Chevassus-Lozza E, Galliano D (2003) Local spillovers, firm organization and export behaviour: evidence from the French food industry. Reg Stud 37(2):147–158Google Scholar
  16. Ciccone A (2002) Agglomeration effects in Europe. Eur Econ Rev 46:213–227Google Scholar
  17. Ciccone A, Peri G (2006) Identifying human-capital externalities, theory with applications. Rev Econ Stud 73:381–412Google Scholar
  18. Combes P-P, Magnac T, Robin J-M (2004) The dynamics of local employment in France. J Urb Econ 56:217–243Google Scholar
  19. Contractor FJ, Kumar V, Kundu SK (2007) Nature of the relationship between international expansion and performance: the case of emerging market firms. J World Bus 42(4):401–417Google Scholar
  20. D’Amuri F, Peri G (2014) Immigration, jobs and employment protection: evidence from Europe before and during the great recession. J Eur Econ Assoc 12(2):432–464Google Scholar
  21. de Loeckera J (2013) Detecting learning by exporting. Am Econ J Microecon 5(3):1–21Google Scholar
  22. Dohse D, Niebuhr A (2018) How different kinds of innovation affect exporting. Econ Lett 163:182–185Google Scholar
  23. Du J, Girma S (2007) Finance and firm export in China. KYKLOS 60(1):37–54Google Scholar
  24. Eickelpasch A, Vogel A (2011) Determinants of the export behaviour of German business services companies. Serv Ind J 31(4):513–526Google Scholar
  25. Fujita M, Weber S (2003) Strategic immigration policies and welfare in heterogenous countries. Working paper, Institute of Economic Research, Kyoto University, KyotoGoogle Scholar
  26. Glaeser EL, Kallal HD, Scheinkman JA, Shleifer A (1992) Growth in cities. J Polit Econ 100(6):1126–1152Google Scholar
  27. Gourlay A, Seaton J, Suppakitjarak J (2005) The determinants of export behaviour in UK service firms. Serv Ind J 25(7):879–889Google Scholar
  28. Greenaway D, Guariglia A, Kneller R (2007) Financial factors and exporting decisions. J Int Econ 73(2):377–395Google Scholar
  29. Griliches Z (1979) Issues in assessing the contribution of research and development to productivity growth. Bell J Econ 10(1):92–116Google Scholar
  30. Heckman J (1979) Sample selection bias as a specification error. Econometrica 47:153–161Google Scholar
  31. Henderson JV (2003) Marshall´s scale economies. J Urb Econ 53(1):1–28Google Scholar
  32. Jacobebbinghaus P (2008) LIAB-Datenhandbuch, version 3.0. (FDZ-Datenreport, 03/2008 (de)), NürnbergGoogle Scholar
  33. Keller W (2004) International technology diffusion. J Econ Lit 42(3):752–782Google Scholar
  34. Kneller R, Pisu M (2007) Industrial linkages and export spillovers from FDI. World Econ 30(1):105–134Google Scholar
  35. Krugman P (1979) A model of innovation, technology transfer, and the world distribution of income. J Polit Econ 87(21):253–266Google Scholar
  36. Lages LF, Silva G, Styles C (2009) Relationship capabilities, quality, and innovation as determinants of export performance. J Int Mark 17(4):47–70Google Scholar
  37. Love JH, Mansury MA (2009) Exporting and productivity in business services: evidence from the United States. Int Bus Rev 18(6):630–642Google Scholar
  38. Martin P, Mayer T, Mayneris F (2011) Spatial concentration and plant-level productivity in France. J Urb Econ 69(2):182–195Google Scholar
  39. Melitz MJ (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6):1695–1725Google Scholar
  40. Niebuhr A (2010) Migration and innovation: does cultural diversity matter for regional R&D activity? Pap Reg Sci S 89(3):563–585Google Scholar
  41. Ottaviano GIP, Peri G (2005) Cities and cultures. J Urb Econ 58(2):304–337Google Scholar
  42. Ozgen C, Nijkamp P, Poot J (2011) The impact of cultural diversity on innovation: evidence from Dutch firm-level data, IZA Discussion PapersGoogle Scholar
  43. Ozgen C, Nijkamp P, Poot J (2012) Immigration and innovation in European regions. In: Nijkamp P, Poot P, Sahin M (eds) Migration impact assessment: new horizons. Edward Elgar, BroadheathGoogle Scholar
  44. Page S (2007) The difference: how the power of diversity creates better groups, firms, schools and societies. Princeton University Press, PrincetonGoogle Scholar
  45. Papke LE, Wooldridge JM (1996) Economic methods for fractional response variables with an application to 401 (K) plan participation rates. J Appl Econ 11(6):619–632Google Scholar
  46. Papke LE, Wooldridge JM (2008) Panel data methods for fractional response vari-ables with an application to test pass rates. J Econ 145(1–2):121–133Google Scholar
  47. Parr J (2002) Agglomeration economies: ambiguities and confusions. Environ Plan A 34:717–731Google Scholar
  48. Partridge Mark D, Rickman Dan S, Rose Olfert M, Tang Ying (2017) International trade and local labor markets: do foreign and domestic shocks affect regions differently? J Econ Geogr 17:375–409Google Scholar
  49. Peri G, Sparber C (2009) Task specialization, immigration, and wages. Am Econ J Appl Econ 1(3):135–169Google Scholar
  50. Ramalho EA, Ramalho JJS, Murteira JMR (2011) Alternative estimating and testing empirical strategies for fractional regression models. J Econ Surv 25(1):19–68Google Scholar
  51. Roberts M, Tybout J (1997) The decision to export in colombia: an empirical model of entry with sunk costs. Am Econ Rev 87(4):545–564Google Scholar
  52. Roper S, Love JH (2002) Innovation and export performance: evidence from the UK and German manufacturing plants. Res Policy 31(7):1087–1102Google Scholar
  53. Roper S, Love JH, Hígon DA (2006) The determinants of export performance: evidence for manufacturing plants in Ireland and Northern Ireland. Scott J Polit Econ 53(5):586–615Google Scholar
  54. Rubiera F, Viñuela A (2013) From local units to economic regions in Spain: where the agglomerations economies are meaningful. In: Fernández E, Rubiera F (eds) Defining the spatial scale in modern regional analysis: new challenges from data at local level. Springer, BerlinGoogle Scholar
  55. Salomon R, Shaver JM (2005) Export and domestic sales: their interrelationship and determinants. Strat Manag J 26(9):855–871Google Scholar
  56. Sjöholm F (2003) Which Indonesian firms export? The importance of foreign networks. Pap Reg Sci 82(3):333–350Google Scholar
  57. Sterlacchini A (2001) The determinants of export performance: a firm-level study of Italian manufacturing. Weltwirtschaftliches Archiv 137(3):450–472Google Scholar
  58. Stiebale J (2011) Do financial constraints matter for foreign market entry? a firm-level examination. World Econ 34(1):123–153Google Scholar
  59. Suedekum J, Wolf K, Blien U (2014) Cultural diversity and local labour markets. Reg Stud 48(1):173–191Google Scholar
  60. Trax M, Brunow S, Suedekum J (2013) Cultural diversity and plant-level productivity (No. 119), DICE discussion paperGoogle Scholar
  61. Trax M, Brunow S, Suedekum J (2015) Cultural diversity and plant-level productivity. Reg Sci Urban Econ 53:85–96Google Scholar
  62. Viñuela A, Rubiera F, Fernández E (2014) Applying economic-based analytical regions: a study of the spatial distribution of employment in Spain. Ann Reg Sci 52(1):87–102Google Scholar
  63. Wagner J (2001) A note on the firm size: export relationship. Small Bus Econ 17(4):229–237Google Scholar
  64. Wakelin K (1998) Innovation and export behaviour at the firm level. Res Pol 26(7–8):829–841Google Scholar
  65. Wooldridge JM (2010a) Econometric analysis of cross section and panel data, 2nd edn. The MIT Press, CambridgeGoogle Scholar
  66. Wooldridge JM (2010b) Correlated random effects models with unbalanced panels, Manuscript (version May 2010), Michigan State UniversityGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Stephan Brunow
    • 1
    • 2
    Email author
  • Luise Pestel
    • 1
  • Mark Partridge
    • 3
    • 4
    • 5
  1. 1.Institute for Employment ResearchNurembergGermany
  2. 2.University of Applied Labour StudiesSchwerinGermany
  3. 3.Ohio State UniversityColumbusUSA
  4. 4.Jinan UniversityGuangzhouChina
  5. 5.GSSIL’AquilaItaly

Personalised recommendations