Kiel Working Papers, Kiel Institute for World Economics
No 1845:
Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany
Horst Raff and Joachim Wagner
Abstract: We examine how foreign ownership of a firm affects the
variety of goods that the firm exports and the number of countries it
trades with. We construct a simple theoretical model of how foreign
ownership may affect these extensive margins of exports and take this model
to data from Germany, one of the leading actors on the world market for
goods. In line with theoretical predictions we find that foreign-owned
firms do export more goods to more countries after controlling for firm
size, productivity and industry affiliation. These differences between
foreign-owned firms and domestically controlled firms are highly
statistically significant, and they are large from an economic point of
view, with foreign-owned firms exporting up to 39% more goods to up to 31%
more countries
Keywords: international trade, foreign ownership, multinational enterprise, foreign direct investment, extensive margins of exports, Germany; (follow links to similar papers)
JEL-Codes: F14,; F23; (follow links to similar papers)
23 pages, June 2013
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