Export Characteristics and Output Volatility: Comparative Firm-Level Evidence for CEE Countries

29 Pages Posted: 12 May 2016

See all articles by Urška Čede

Urška Čede

Bank of Slovenia

Bogdan Mihai Chiriacescu

National Bank of Romania

Peter Harasztosi

Joint Research Centre, Italy

Tibor Lalinsky

National Bank of Slovakia

Jaanika Meriküll

Bank of Estonia; University of Tartu

Date Written: May 11, 2016

Abstract

The literature shows that openness to trade improves long-term growth but also that it may increase exposure to high output volatility. In this vein, our paper investigates whether exporting and export diversification at the firm level have an effect on the output volatility of firms. We use large representative firm-level databases from Estonia, Hungary, Romania, Slovakia and Slovenia over the last boom-bust cycle in 2004-2012. The results confirm that exporting is related to higher volatility at the firm level. There is also evidence that this effect increased during the Great Recession due to the large negative shocks in export markets. In contrast to the literature and empirical findings for large or advanced countries we do not find a statistically significant and consistent mitigating effect from export diversification in the Central and Eastern European countries. In addition, exporting more products or serving more markets does not necessarily result in higher stability of firm sales.

Keywords: export diversification, export share, volatility of sales, business cycle, Central and Eastern Europe, CEE

JEL Classification: F14, F43, O57

Suggested Citation

Čede, Urška and Chiriacescu, Bogdan Mihai and Harasztosi, Peter and Lalinsky, Tibor and Meriküll, Jaanika, Export Characteristics and Output Volatility: Comparative Firm-Level Evidence for CEE Countries (May 11, 2016). ECB Working Paper No. 1902. Available at SSRN: https://ssrn.com/abstract=2778600

Urška Čede (Contact Author)

Bank of Slovenia ( email )

Slovenska cesta 35
Slovenija, 1505
Slovenia

Bogdan Mihai Chiriacescu

National Bank of Romania ( email )

Bucharest
Romania

Peter Harasztosi

Joint Research Centre, Italy ( email )

Via E. Fermi 1
I-21020 Ispra (VA)
United States

Tibor Lalinsky

National Bank of Slovakia ( email )

Imricha Karvasa 1
813 25 Bratislava
Slovakia

Jaanika Meriküll

Bank of Estonia ( email )

Estonia Building 13
15095 Tallinn
Estonia

University of Tartu ( email )

Ülikooli 18
Tartu 50090
Estonia

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