KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
The Lumpiness of German Exports and Imports of Goods
Abstract: This paper looks at a hitherto neglected extensive margin
of international trade by investigating for the first time the frequency at
which German exporters and importers trade a given good with a given
country. Imports and exports show a high degree of lumpiness. In a given
year about half of all firm-good-country combinations are recorded only
once or twice for trade with EU-countries, and this is the case for more
than 60 percent of all firm-good-country combinations in trade with non-EU
countries. The frequency of recorded transactions tends to decline with an
increase in the number of transactions per year. This is in accordance with
the presence of per-shipment fixed costs that provide an incentive for
trading firms to engage in cross-border transactions infrequently.
Empirical models show that for Germany the frequency of transactions at the
firm-good-country level tends to decrease with an increase in per-shipment
costs when unobserved firm and goods characteristics are controlled for.
Keywords: Lumpiness of trade; imports; exports; Germany; (follow links to similar papers)
JEL-Codes: F14; (follow links to similar papers)
41 pages, May 10, 2016
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