KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
Extensive Margins of Imports and Profitability: First Evidence for Manufacturing Enterprises in Germany
Abstract: This paper uses a tailor-made newly available data set for
enterprises from manufacturing industries in Germany to investigate for the
first time the links between the extensive margins of imports (the number
of imported goods and the number of countries imported from) and firm
profitability. While both extensive margins are highly positively linked
with firm productivity, profits are not higher in firms that import more
goods and from more countries. This demonstrates that productivity
advantages of importers are eaten up by extra costs related to buying more
goods in more countries.
Keywords: Imports; intensive margins; profitability; Germany; (follow links to similar papers)
JEL-Codes: F14; (follow links to similar papers)
17 pages, May 20, 2014
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