Exports of firms and diversity: an empirical assessment for Germany
in: Peter Huber, Dieter Pennerstorfer, Digitalization, Urban Sprawl and Regional Economics – Selected Papers of the 10th WIFO Regional Economics Workshop at the
Austrian Institute of Economic Research, Vienna, 25-26 September 2017
The international trade literature highlights the importance of firm productivity and economies of scale on the firm's international
export success. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to related
firms and they gain from knowledge spill-overs and other positive externalities. They may also benefit from a potentially
large supply of diverse workers that possess distinct knowledge and problem-solving skills. In such environments, firms may
be more prone to export. In this paper, we employ a comprehensive German data set that combines survey and administrative
data. We ask whether German firms (i.e., establishments) export more as a result of localisation and urbanisation externalities,
and labour market pooling associated with workforce diversity, while controlling for a variety of establishment characteristics.
Using a fractional response model, we provide evidence that manufacturers and smaller establishments benefit more from externalities
and especially from knowledge spill-overs. There is less evidence supporting the benefit of workforce diversity; however,
that factor may be associated with between-establishment variation.
Forschungsbereich:Strukturwandel und Regionalentwicklung