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How do exporters react to changes in cost competitiveness?

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dc.contributor.author Decramer, Stefaan
dc.contributor.author Fuss, Catherine
dc.contributor.author Konings, Jozef
dc.date.accessioned 2016-11-18T09:35:26Z
dc.date.available 2016-11-18T09:35:26Z
dc.date.issued 2014-12
dc.identifier.citation Decramer Stefaan, Fuss Catherine, Konings Jozef, 2014, European Central Bank; How do exporters react to changes in cost competitiveness?. http://nur.nu.edu.kz/handle/123456789/1890 ru_RU
dc.identifier.uri http://nur.nu.edu.kz/handle/123456789/1890
dc.description.abstract Policy-making institutions such as the European Commission, the ECB and the OECD often use unit labor costs as a measure of international competitiveness. The goal of this paper is to examine how well this measure is related to international export performance at the firm level. To this end, we use Belgian firm-level data for the period 1999-2010 to analyze the impact of unit labor costs on exports. We use exports adjusted for their import content. We find a statistically significant negative effect of unit labor costs on export performance of firms with an estimated elasticity of the intensive margin of exports ranging between -0.2 and -0.4. This result is robust to various specifications, including firm, time and sector fixed effects and estimation approaches. We find that this elasticity varies between sectors and between firms, with firms that are more labor-intensive having a higher elasticity of exports with respect to unit labor costs. The micro data also enable us to analyze the impact of unit labor costs on the extensive margin. Our results show that higher unit labor costs reduce the probability of starting to export for non-exporters and increase the probability of exporters stopping. While our results show that unit labor costs have an impact on the intensive margin and extensive margin of firm-level exports, the effect is rather low, suggesting that passthrough of costs into prices is limited or that demand for exported products is not elastic. The latter is consistent with recent trade models emphasizing that not only relative costs, but also demand factors such as quality and taste matter for explaining firm-level exports. ru_RU
dc.language.iso en ru_RU
dc.publisher European Central Bank ru_RU
dc.rights Attribution-NonCommercial-ShareAlike 3.0 United States *
dc.rights.uri http://creativecommons.org/licenses/by-nc-sa/3.0/us/ *
dc.subject unit labor costs ru_RU
dc.subject exports ru_RU
dc.subject competitiveness ru_RU
dc.subject heterogeneity ru_RU
dc.subject Research Subject Categories::SOCIAL SCIENCES::Business and economics ru_RU
dc.title How do exporters react to changes in cost competitiveness? ru_RU
dc.title.alternative The Competitiveness Research Network ru_RU
dc.type Working Paper ru_RU

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Attribution-NonCommercial-ShareAlike 3.0 United States Except where otherwise noted, this item's license is described as Attribution-NonCommercial-ShareAlike 3.0 United States