A Note on the Firm Size - Export Relationship

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet


The positive relationship between firm size and direct exports is often considered as a stylized fact. Numerous econometric investigations back theoretical considerations by showing that a ceteris paribus positive relationship between firm size and direct export activities exists. This note contributes to the literature by closely looking at an econometric modelling issues that has largely been neglected hitherto. Various approaches used in the literature to model the exports/sales ratio, which is a percentage variable with usually many observations at the lower limit, are discussed. It is argued that all these methods are seriously flawed, and an alternative approach is suggested that is applied using data from a large comprehensive recent survey of German manufacturing establishments. Furthermore, the relation between firm size and exports is examined in four selected industries to test whether the importance of economies of scale and transaction cost efficiencies vary considerably between industries.

ZeitschriftSmall Business Economics
Seiten (von - bis)229-237
Anzahl der Seiten9
PublikationsstatusErschienen - 2001

Bibliographische Notiz

Funding Information:
This paper uses data from the Hannover Firm Panel project financially supported by the Volkswagen Foundation. I thank Robert Kieschnick for helpful discussions on modelling a percentage variable with many limit observations and for his code to estimate regressions based on the beta distribution, Pravin K. Trivedi for