Export, Migration and Costs of Trade: Evidence from Central European Firms

Abstract

Pennerstorfer D. Export, migration and costs of trade: evidence from Central European firms, Regional Studies. This article analyses the link between immigration and trade at the firm level, utilizing information on the export activities of 8300 firms located in different Central European countries (Austria, Czech Republic, Slovakia and Hungary) for various export markets as well as regional data on immigration. The empirical analysis suggests a strong, economically meaningful and statistically significant impact of immigration on the export propensity (extensive margin), whereas the influence on firms' export volumes (intensive margin) is much smaller. This leads to the conclusion that immigrants promote export activities to their home countries mainly by reducing fixed costs of trade.

Pennerstorfer D. 出口、移民以及贸易成本：来自中欧企业的证据，区域研究。本文运用位于中欧不同国家（奥地利、捷克共和国、斯洛伐克与匈牙利）的八千三百个企业出口至各个市场的活动信息，以及移民的区域数据，分析企业层级中，移民和贸易的关联。经验分析指出，移民对于出口倾向（外延边际），具有在经济上富有意义、且统计上呈现显着的强烈影响，但对企业出口量（集约边际）的影响则小得多。此一发现导向以下结论：移民主要是透过降低贸易的固定成本，来促进出口至其母国的贸易活动。

Pennerstorfer D. L'exportation, la migration et les coûts des échanges commerciaux: des résultats provenant des entreprises situées en Europe centrale, Regional Studies. Cet article analyse le lien entre l'immigration et les échanges commerciaux au niveau de l'entreprise, employant des données sur les activités exportatrices de 8300 entreprises situées dans des pays différents de l'Europe centrale (à savoir en Autriche, en République tchèque, en Slovakie et en Hongrie) pour divers marchés à l'exportation aussi bien que des données régionales sur l'immigration. L'analyse empirique laisse supposer que l'immigration a un impact fort, et significatif des points de vue économique et statistique, sur la propension à exporter (marge extensive), tandis que l'impact du volume des exportations des entreprises (marge intensive) s'avère beaucoup moins significatif. Il ressort en conclusion que les immigrés cherchent à promouvoir les activités exportatrices vers leurs pays d'origine principalement en réduisant les coûts fixes des échanges commerciaux.

Pennerstorfer D. Export, Migration und Kosten des Außenhandels: eine empirische Analyse mitteleuropäischer Unternehmen, Regional Studies. Dieser Artikel analysiert den Zusammenhang zwischen Immigration und Exporten auf Firmenebene. Die Analyse stützt sich dabei auf Daten zum Exportverhalten von 8300 Unternehmen aus verschiedenen mitteleuropäischen Ländern (Österreich, Tschechien, Slowakei und Ungarn) für unterschiedliche Exportmärkte sowie auf regionale Informationen zu Migration. Dabei kann ein ökonomisch bedeutender und statistisch gut abgesicherter Effekt auf die Exportwahrscheinlichkeit (extensive margin) gefunden werden, während der Einfluss auf das Exportvolumen der Unternehmen (intensive margin) deutlich geringer ausfällt. Daraus kann geschlossen werden, dass Immigranten den Außenhandel zu deren Herkunftsländern vor allem durch die Reduktion von fixen Handelskosten begünstigen.

Pennerstorfer D. Exportación, migración y costes de las transacciones comerciales: análisis de empresas de Europa central, Regional Studies. En este artículo se analiza la relación entre la inmigración y las transacciones comerciales de empresas a partir de datos sobre las actividades de exportación de 8300 empresas ubicadas en diferentes países de Europa central (Austria, República Checa, Eslovaquia y Hungría) para varios mercados de exportación, y de datos regionales sobre la inmigración. El análisis empírico indica un fuerte impacto económica y estadísticamente significativo de la inmigración en la tendencia a la exportación (margen extensivo), mientras que la influencia en los volúmenes de exportación de las empresas (margen intensivo) es mucho más pequeña. Con esto se llega a la conclusión de que los inmigrantes fomentan las actividades de exportación a sus países autóctonos, sobre todo al reducir los costes fijos de las transacciones comerciales.

• Export behaviour
• Immigration
• Firm-level data
• Margins of trade

• 出口行为
• 移民
• 企业层级数据
• 贸易边际

• Comportement des exportateurs
• Immigration
• Données au niveau de l'entreprise
• Marges des échanges commerciaux

• Exportverhalten
• Immigration
• Firmendaten
• Ränder des Außenhandels

• Comportamiento de exportación
• Inmigración
• Datos de empresas
• Márgenes comerciales

JEL classifications:

• F10
• F22
• R12

Acknowledgements

The author would like to thank the editor and two anonymous referees for helpful suggestions. The author is also grateful to Stefan Bühler, Elisabeth Christen, Geoffrey J. D. Hewings, Peter Huber, Klaus Novotny, Astrid Pennerstorfer, Michael Pfaffermayr, Hannes Winner, the participants at the 52nd Conference of the European Regional Science Association (ERSA) in Bratislava (Slovakia), those at the 5th Summer Conference in Regional Science in Kiel (Germany), as well as the participants of workshops and colloquia in Vienna (Austria), Nuremberg (Germany) and Urbana-Champaign (Illinois, United States) for thoughtful comments on earlier versions of the article.

SUPPLEMENTAL DATA

Supplemental data for this article can be accessed at: http://dx.doi.org/10.1080/00343404.2014.947565

Notes

1. Or, equivalently, an increase in the export probability of firms.

2. The export elasticity of immigration is defined as the relative change of export volumes over the relative change of the number of immigrants.

3. Chaney (2008) assumes that the productivity of firms is Pareto distributed over the interval with the shape parameter . He estimates the ratio using data on US firms. Eaton et al. (2008) find a smaller value for this ratio (around 1.5) using data on the export behaviour of French firms.

4. Peri and Requena-Silvente (2010, pp. 1437f.) are aware of this inaccuracy and discuss this issue. However, they state that ‘it would be very interesting (but so far impossible with the Spanish data) to do the exercise decomposing the margins at the firm-product rather than transaction level’.

5. These arguments are also supported by White and Tadesse (2008), who find that the trade-enhancing effect of immigrants is particularly strong for culturally very different countries.

6. All appendices and their tables are available in the Supplemental Data online.

7. Fixed firm effects also control for regional heterogeneity.

8. The definition of the extensive margin elasticity is slightly different to that of Chaney (2008). In this article the impact of a reduction in export costs on the probability of firms to export is estimated (while the firms' export volumes are not taken into account), while Chaney defines the extensive margin as the contribution of new exporters to the aggregate export volume. The analysis in this article (implicitly) assumes that the ‘marginal exporter’ exports an average volume, while theory suggests that marginal exporters are characterized by the lowest productivity (among exporting firms) and (therefore) export relatively low volumes. This might cause the extensive margin to be slightly overestimated.

9. The survey was conducted for a project investigating current and planned cross-border activities of firms located in these countries. The possibilities of firms located in the Czech Republic, Slovakia and Hungary to post workers to Austria was restricted for some industries until May 2011. The main focus of the project was to predict changes in export behaviour of firms after lifting these restrictions. The sample is stratified with respect to industry and region, as enterprises from particular industries and firms located close to the border between Austria, on the one hand, and the Czech Republic, Slovakia and Hungary, on the other hand, were considered to be most important for this project. While the sample is stratified with respect to these two dimensions, the sample is randomly selected within each region–industry pair.

10. Information on GDP and GDP per capita of Russia, Ukraine and Serbia are not published by Eurostat and come from the International Monetary Fund (IMF).

11. With respect to the UK, the survey asks about the export behaviour to Great Britain (rather than the UK), while information on immigration and destination country characteristics are based on UK data.

12. Additionally to information on both total sales and the volume of sales abroad, the survey includes the share of sales abroad (over total sales). Firms reporting inconsistent figures to these questions are excluded from the sample when export volumes are analysed.

13. Within the term ‘same or similar language’, Austria, Germany and Switzerland as well as the Czech Republic and Slovakia are pooled together, although German is the main language only in parts of Switzerland, and the Czech and Slovakian languages are slightly different.

14. A composite index based on different dimensions of cultural distance between home and destination country developed by Hofstede (1980) is also included. As these variables are not available for all potential export destinations, the regression results including this variable are relegated to Tables B3 and B4 in Appendix B in the Supplemental data online.

15. Unobserved region–destination (or firm–destination) heterogeneity cannot be controlled for by including respective fixed effects due to the absence of time-series data. Also, identifying long-run effects by using temporal variation of the stock of immigrants is difficult unless immigration is not a recent phenomenon and panel data for very long time periods are available.

16. Parameter estimates on and significance levels of immigration are hardly affected when including firm characteristics to control for firm heterogeneity. Regression results including firm specific variables are summarized in Appendix C in the Supplemental data online.

17. Anderson and van Wincoop (2003) argue that not only absolute, but also relative trade costs are important in explaining trade flows. Therefore, immigration from one country might increase relative export costs to other countries (by reducing export costs to the source country of immigration). See Appendix C in the Supplemental data online for a more extensive discussion on this issue.

18. Angrist and Pischke (2009, pp. 310ff.) list the use of clustered standard errors as one solution to the Moulton problem. The clustered estimator of the covariance matrix is consistent if the number of groups (321 in this sample) gets large. The use of clustered standard errors when estimating export volumes is, however, infeasible, as (random or fixed) firm effects are included to exploit the panel structure of the data and as one firm is not nested in the cluster variable (home region – destination country).

19. The definition of the elasticities is slightly different compared with that of Chaney (2008), who defines the extensive margin elasticity as the (relative) increase in trade volume coming from additional exporters. Also note that the elasticities are not multiplied by –1 as in Chaney.

20. The group of non-European Union member countries is very heterogeneous. If Russia and Ukraine – two countries that are very different compared with all other potential export destinations in the sample – are excluded, the parameter estimate on European Union membership gets significantly positive. See Appendix B in the Supplemental data online for details.

21. The parameter estimates on binary and index variables are semi-elasticities.

22. The random effects model SALES [1] is rejected by the Hausman test in favour of the respective fixed effects model (specification [2]). However, the results on this specification are summarized in Table 4 to facilitate comparing intensive and extensive margin elasticities.