The Performance of Trading Firms in the Services Sector - Comparable Evidence from Four EU Countries

49 Pages Posted: 15 Jun 2013

See all articles by Jože P. Damijan

Jože P. Damijan

University of Ljubljana, Slovenia - Department of International Economics

Stefanie Haller

University College Dublin (UCD)

Ville Kaitila

ETLA, Research Institute of the Finnish Economy

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy

Emmanuel Milet

Paris School of Economics (PSE)(Paris1)

Matija Rojec

University of Ljubljana - Faculty of Social Sciences

Daniel Mirza

François Rabelais University

Date Written: May 2012

Abstract

We analyse common stylized facts of services firms engaged in trade in a comparative study across four EU member countries. We find that, though relatively less engaged in trade than manufacturing firms, services firms have similar traits. Services firms are more likely to import than to export. Their prevalent type of trade is trade in goods. The complexity of trade activities is increasing in firm size and productivity. Two-way traders outperform one-way traders. Services are more likely to be traded by firms already engaged in trade of goods. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant pre-switching premia. In contrast, learning effects from switching trading status are uncommon. This evidence points to significant fixed cost of being engaged in trade. Thus, the literature on heterogeneous firms is able to explain the sorting of firms into trading and non-trading firms in the services sectors as well.

Keywords: services sectors, exports, imports, trade in goods and services, trade premia

JEL Classification: F14, F19, F23

Suggested Citation

Damijan, Joze P. and Haller, Stefanie and Kaitila, Ville and Maliranta, Mika and Milet, Emmanuel and Rojec, Matija and Mirza, Daniel, The Performance of Trading Firms in the Services Sector - Comparable Evidence from Four EU Countries (May 2012). Available at SSRN: https://ssrn.com/abstract=2279324 or http://dx.doi.org/10.2139/ssrn.2279324

Joze P. Damijan (Contact Author)

University of Ljubljana, Slovenia - Department of International Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia
+386 61 189 24 00 (Phone)
+386 61 189 26 98 (Fax)

Stefanie Haller

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
Ireland

Ville Kaitila

ETLA, Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki
Finland

Mika Maliranta

ETLA, The Research Institute of the Finnish Economy ( email )

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
Finland
+358 9 609900 (Phone)
+358 9 601753 (Fax)

Emmanuel Milet

Paris School of Economics (PSE)(Paris1) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Matija Rojec

University of Ljubljana - Faculty of Social Sciences ( email )

Kardeljeva ploscad 5
Ljubljana, 1000
Slovenia

Daniel Mirza

François Rabelais University ( email )

60 rue du Plat D'Etain
Tours, 37020
France

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