Distance-sensitivity of German exports: first evidence from firm-product level data

ABSTRACT

This article uses a tailor-made new data set of 7 580 251 observations for German exports at the firm-product-destination level to estimate a gravity equation and to investigate the link between the amount of firms’ exports and the distance to destination countries. It is shown that, in line with stylized facts based on aggregate data, the quantity of exports declines significantly with distance within a firm for a given product.

KEYWORDS:

• Exports
• distance
• gravity equation
• Germany

JEL CLASSIFICATION:

• F14

Acknowledgments

All computations were done at the Research Data Centre of the Federal Statistical Office in Wiesbaden. I thank Melanie Scheller for preparing the transaction-level data for exports and for checking the output of my do-files for the violation of privacy. The micro data used are strictly confidential but not exclusive; see http://www.forschungsdatenzentrum.de/datenzugang.asp for information on how to access the data. To facilitate replications the Stata do-file used is available from the author on request.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ A discussion of the gravity model and its relation to theoretical models of trade is far beyond the scope of this letter; see Head and Mayer (2014) for a comprehensive treatment. For a meta-analysis of 1467 distance effects estimated in 103 papers, see Disdier and Head (2008).

² Given that the control variables serve as controls only in the empirical models, we do not comment on the results for the estimated regression coefficients.