Does Exporting Improve Matching? Evidence from French Employer-Employee Data

82 Pages Posted: 1 Jun 2015

See all articles by Matilde Bombardini

Matilde Bombardini

University of British Columbia (UBC)

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Maria Tito

Vancouver School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2015

Abstract

Does opening a market to international trade affect the pattern of matching between firms and workers? And does the modified sorting pattern affect welfare? This paper answers these questions both theoretically and empirically in three parts. We set up a model of matching between heterogeneous workers and firms where variation in the worker type at the firm level exists in equilibrium only because of the presence of search costs. When firms gain access to the foreign market their revenue potential increases. When stakes are high, matching with the right worker becomes particularly important because deviations from the ideal match quickly reduce the value of the relationship. Hence exporting firms select sets of workers that are less dispersed relative to the average. We then document a novel fact about the hiring decisions of exporting firms versus non-exporting firms in a French matched employer-employee dataset. We find that exporting firms feature a lower type dispersion in the pool of workers they hire. The matching between exporting firms and workers is even tighter in sectors characterized by better exporting opportunities as measured by foreign demand or tariff shocks. In a calibrated general equilibrium version of the model we show that trade opening increases welfare by more when search costs are high, pointing to an additional source of gains from trade.

Suggested Citation

Bombardini, Matilde and Orefice, Gianluca and Tito, Maria, Does Exporting Improve Matching? Evidence from French Employer-Employee Data (May 2015). NBER Working Paper No. w21225, Available at SSRN: https://ssrn.com/abstract=2612780

Matilde Bombardini (Contact Author)

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

Gianluca Orefice

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Maria Tito

Vancouver School of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

HOME PAGE: http://https://sites.google.com/site/mariatitopersonal/

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