Exports and Firm Characteristics in German Manufacturing Industries: New Evidence from Representative Panel Data

Germany is one of the leading actors on the world market for manufactured goods, but not every firm from a manufacturing industry in Germany is an exporter. In 2006, the share of exporters in all enterprises was 69 percent in West Germany and 52 percent in East Germany. Reliable information on the characteristics of exporting and non-exporting firms is important to guide theorists and policy makers in an evidence-based way. This paper uses recently released rich, high-quality data for a large representative panel of enterprises from German manufacturing industries to investigate the links between firm characteristics and export activities, demonstrating the decisive role of human capital intensity for exporting. It links these findings to the recent literature from the new new trade theory on international activities of heterogeneous firms, which emphasizes the role of productivity in exporting. It shows that productivity is important for exporting as is hypothesized in the formal theoretical models, but that contrary to the assumption made in these models, productivity is not (only) the result from a random draw from the productivity distribution—it is strongly positively related to human capital intensity.