Europe’s Export Superstars – it’s the Organization!
12 May 2015 4:00 pm
Dalia Marin, LMU Munich
wiiw, Rahlgasse 3, 1060 Vienna, lecture hall (entrance from the ground floor)
What explains Germany’s superb export performance? Is Germany’s export behaviour very distinct compared to other European countries? In this paper, we explore the organizational responses to competition of 14,000 exporting firms in 7 European countries. We examine the export business model of the median exporter in each country as well as of the top 1 % of exporters in each country accounting for 20 % to 55 % of total exports. What do these firms do to become superstars? We find, first, that the export market share of the median exporter in each of the countries to the world are more than tripled (in some cases the export market share increases 10 fold) for firms which combine decentralized management with offshoring production to low wage countries. Exporters which abstain from any organizational adjustment do very badly. Decentralized management provides incentives for workers for product improvements allowing exporters to compete on quality. Offshoring production to low wage countries reduces costs allowing exporters to compete on prices. Second, we find that Germany is the leading quality exporter in Europe followed by Austria and Spain. Among the top 10 % percent of exporters there is no single firm with low quality in Germany and Austria which suggest that decentralized management has provided incentives for quality in these countries. Third, Germany’s exports are the least vulnerable to price increases, while exports in France and Italy respond strongly to price changes and thus reducing costs via offshoring benefit these countries most.
Dalia Marin will present together with Jan Schymik and Jan Tscheke.
Keywords: Exports, firm organization, offshoring, productivity, product quality
JEL classification: F14, D23, L22