European firms in a global economy

What are the features of European firms that successfully compete in international markets?

To achieve its aims, EFIGE combined the latest theoretical and empirical research through a cross-country survey. The project also produced seven country reports covering Germany, Spain, France, Italy, Hungary, Austria and the United Kingdom. It identified the features of European firms for successfully competing abroad and focused on more successful countries in international trade.

One important aspect of the project involved examining the ability of firms to compete in foreign markets, looking as well at their reliance on local and global production networks. Other key aspects covered a better understanding of the effect of the euro on European firms, how these firms have weathered the crisis and what the barriers to firm growth are.

In effect, the project produced a thorough assessment of the internationalisation patterns of European firms. In addition to the country reports and cross-country report that identifies the triggers to competitiveness, project results also included 62 working papers and 4 policy briefs.

The project, led by Bruegel, working together with seven other partners, received the support of the Directorate General Research of the European Commission through its FP7 programme. It ran from September 1th 2008 to August 31th 2012.

About EFIGE

Nations do not produce, do not trade, do not compete; it is firms that produce trade and compete. This simple truth makes it clear that understanding the firm-level facts is essential to good policy making.

Firm-level analysis should complement the policy making toolbox in Europe. However, currently we do not have harmonized statistical information on European firms.

Why is harmonised statistical information important? Because it reveals facts that are simply unobservable at the aggregate level but determine aggregate economic performance.

New developments in the world economy have increased the competitive pressures on European firms in international as well as in domestic markets. The divide between winners and losers from globalisation does not run anymore only between sectors. Increasingly both winners and losers can be found also within sectors. The chances of European countries to grow, prosper and provide well being to their citizens rest on the ability of their firms to become successful traders and producers in foreign markets within and outside the EU.

Understanding the interaction between globalisation and the European economy requires an in-depth analysis of how firms are coping with this challenging environment and particularly how they are reorganising their international activities in the internal market and outside Europe. This is what EFIGE partners are working on.

Disclaimer : EFIGE was financed by the Seventh Framework Programme of the European Union. This page does not reflect the official view of the European Commission. It was lead by a consortium of members based in Belgium, France, Spain, Italy, Hungary and the United Kingdom.

Dataset

Click here to access the EFIGE dataset

Publications

WORKING PAPERS

2012

Trade, innovation and productivity: a quantitative analysis of Europe – Carlos III: Aranzazu Crespo, Oct ’12

International integration of used markets with a monopoly producer – Carlos III: Eric Bond and Susanna Esteban, Sep’12

The role of age in shaping firms’ size dynamics: ‘learning’ effects or willingness to grow?– Ld’A: Giorgio Barba Navaretti, Davide Castellani and Fabio Pieri, Aug’12

Bank internationalisation and firm exports: evidence from matched firm-bank data – Bank of Italy: Raffaello Bronzini and Alessio D’Ignazio, Aug’12

Demand or productivity: What determines firm growth? – Ld’A: Andrea Pozzi and Fabiano Schivardi, Aug’12

Labour pooling as a source of agglomeration: an empirical investigation – CEPR: Henry G. Overman and Diego Puga, Aug ’12

Tax credit, exports and regional disparity: microevidence from Hungary – IEHAS: Gábor Békés and Péter Harasztosi, Aug’12

Borrowing locally, operating globally? Financing and trading patterns of firms during the economic crisis – IAW: Katja Neugebauer and Julia Spies, Aug’12

Buyer-supplier relationships, internationalisation and product innovation – Ld’A: Massimiliano Bratti and Giulia Felice, Aug’12

Margins of Hungarian exports during crisis – IEHAS: Balázs Muraközy, Aug’12

Internationalisation modes of European firms – IEHAS: Gábor Békés and Balázs Muraközy, Aug’12

Welfare effects of administrative barriers to trade – IEHAS: Cecília Hornok and Miklós Koren, Aug’12

Learning by working in big cities – CEPR: Jorge De la Roca and Diego Puga, Aug’12

Invoicing currency, firm size and hedging – CEPII: Julien Martin and Isabelle Méjean, Jul’12

Heterogeneous trade costs and wage inequality: a model of two globalisations – UC3M: Sergi Basco and Martí Mestieri, Jul’12

Technological change, trade in intermediates and the joint impact on productivity – CEPR: Esther Ann Bøler, Andreas Moxnes and Karen Helene Ulltveit-Moe, Jun ’12

The few leading the many: foreign affiliates and business cycle co-movement – CEPII: Jörn Kleinert, Julien Martin and Farid Toubal, May ’12

Trade and tasks: a preliminary exploration with German data – IAW: Sascha O. Becker and Marc-Andreas Muendler, May ’12

Are firms exporting to China and India different from other exporters? – Ld’A: Giorgio Barba Navaretti, Matteo Bugamelli, Riccardo Cristadoro and Daniela Maggioni, May ’12

Sorting and local wage and skill distributions in France – CEPR: Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon and Sébastien Roux, Apr ’12

How frequently do firms export? Evidence from France – CEPII, IEHAS: Gábor Békés, Lionel Fontagné, Balázs Muraközy and Vincent Vicard, Mar ’12

The discriminatory effect of domestic regulations on international services trade: evidence from firm-level data – CEPII: Matthieu Crozet, Emmanuel Milet and Daniel Mirza, Feb ’12

Hub-and-spoke free trade areas: theory and evidence from Israel – Carlos III: George Deltas, Klaus Desmet and Giovanni Facchini, Jan ’12

2011

Imported inputs and skill upgrading – LdA: Rosario Crinò, Nov’11

Labour demand during the crisis: what happened in Germany? – IAW: Olga Bohachova, Bernhard Boockmann and Claudia M. Buch, Nov.’11

Low-Wage Countries’ Competition, Reallocation Across Firms and the Quality Content of Exports – CEPII: Julien Martin and Isabelle Méjean, Nov ’11

Administrative barriers and the lumpiness of trade – IEHAS: Cecília Hornok and Miklós Koren, October ‘2011

Market Size, Competition, and the Product Mix of Exporters – Bruegel, CEPR: Thierry Mayer, Marc Melitz and Gianmarco Ottaviano, October’11

New imported inputs, new domestic products – LdA: Italo Colantone and Rosario Crinò, July ’11

Trade crisis? What trade crisis? – CEPR: Kristian Behrens, Gregory Corcos and Giordano Mion, June ’11

Managers’ mobility, trade status and wages – CEPR: Giordano Mion and Luca David Opromolla, June ’11

Innovation and the Elasticity of Trade Volumes to Tariff Reductions – Carlos III: Loris Rubini, May’11

The demand and supply of quality: a case study of televisions – IEHAS: Miklós Koren and Balázs Muraközy, Mar’11

2010

Export growth and factor market competition: theory and some evidence – Ld’A: Julian Emami Namini, Giovanni Facchini and Ricardo A. Lopez, Dec’ 10

The Global Operations of European Firms – Second Efige Policy Report – Giorgio Barba Navaretti,Ld’A, Matteo Bugamelli,Bank of Italy, Fabiano Schivardi, CEPR, Carlo Altomonte, Bruegel, Daniel Horgos Ld’A and Daniela Maggioni, Ld’A, Nov’ 10

Clustering the Winners: The French Policy of Competitiveness Clusters – CEPII: Lionel Fontagné, Pamina Koenig , Florian Mayneris and Sarah Poncet, July ’10

Product adjustments: a firm-level analysis of the impact of a real exchange-rate shock – CEPR: Andreas Moxnes and Karen-Helene Ulltveit-Moe, July’10;

Firm size and the extensive margin – IEHAS: Laszlo Halpern and Balazs Murakozy, Apr’10

Are exporters more likely to introduce product innovations? – Ld’A: Massimiliano Bratti and Giulia Felice, Mar’10

Network and border effects: where do foreign multinationals locate in Germany? – IAW: Julia Spies, Mar ’10;

Externally Published in: Regional Science and Urban Economics, Volume 40, Issue 1, Pages 20-32

Do sales tax credits stimulate the automobile market? – Carlos III: Jiawei Chen, Susanna Esteban and Matthew Shum, Feb’10;

Externally Published in: International Journal of Industrial Organization, Volume 28, Issue 4, Pages 397-402

The tip of the iceberg: modeling trade costs and implications for intraindustry reallocation – CEPR: Alfonso Irarrazabal, Andreas Moxnes and Luca David Opromolla, Feb’10;

Externally Published in: CEPR Discussion Paper 7685

Margins of international banking: is there a productivity pecking order in banking, too? – IAW: Claudia Buch, Cathérine Tahmee Koch and Michael Kötter, Jan ’10;

Externally Published in: Deutsche Bundesbank Discussion Paper Series 2: Banking and Financial Studies No 12/2009

2009

How do different exporters react to exchange-rate changes? Theory, empirics and aggregate implications – CEPR: Nicolas Berman, Philippe Martin and Thierry Mayer, Nov’09

Externally published in: CEPR Discussion Paper 7493

The productivity advantages of large cities: distinguishing agglomeration from firm selection – CEPR: Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Diego Puga and Sébastien Roux, Oct’09

Externally published in: CEPR Discussion Paper 7191

On spatial dynamics – Carlos III: Klaus Desmet and Esteban Rossi-Hansberg, Oct’09

Externally Published in: Journal of Regional Science, Volume 50, Issue 1, pages 43–63

Spatial development – Carlos III: Klaus Desmet and Esteban Rossi-Hansberg, Oct’09

How do multiproduct exporters react to a change in trade costs? – CEPII: Antoine Berthou and Lionel Fontagné, Oct’09

Price dispersion in trade with EU countries – IEHAS: László Halpern and Balázs Muraközy, Oct’09

The determinants of intra-firms trade – LdA: Gregory Corcos; Delphine Irac; Giordano Mion and Thierry Verdier, Sept’09

Productivity and the international firm: Dissecting Heterogeneity – LdA: Davide Castellani and Giorgia Giovannetti, Sept’09;

Externally Published in: Journal of Economic Policy Reform, Volume 13, Issue 1

Export Intensity and Productivity – LdA:  Rosario Crino and Paolo Epifani Sept’09;

Externally Published in: Deutsche Bundesbank Discussion Paper Series 1: Economic Studies 2009, 29, Deutsche Bundesbank, Research CentreFinancial Constraints and the Margins of FDI? – IAW: Claudia M. Buch, Iris Kesternich, Alexander Lipponer and Monika Schnitzer, Sept’09

Offshoring and the Onshore Compositionof Tasks and Skills – IAW: Sascha O. Becker, Karolina Ekholm and Marc-Andreas Muendler, Aug’09

Externally Published in: CEPR Discussion Paper 7391

Barriers to Internationalization: Firm-Level Evidence from Germany – IAW: Christian Arndt, Claudia M. Buch and Anselm Mattes , Aug’09

Local Export Spillovers in France – CEPII: Pamina Koenig, Florian Maynerisz and Sandra Poncet, June’09

Externally Published in: European Economic Review, Volume 54, Issue 4, Pages 622-641

Quality sorting and trade: Firm-level evidence for French wine – CEPR: Matthieu Crozet, Keith Head and Thierry Mayer, Apr’09

Externally Published in: CEPR Discussion Paper 7295

Bigger is Better: Market Size, Demand Elasticity and Innovation – Carlos III: Klaus Desmet and Stephen L. Parente, Apr’09

Externally Published in: International Economic Review, Volume 51, Issue 2, pages 319–333, May 2010

The Evolution of Markets and the Revolution of Industry: A Quantitative Model of England’s Development, 1300-2000 – Carlos III: Klaus Desmet and Stephen L. Parente, Apr’09

Temporary trade – IEHAS: Balazs Murakozy and Gabor Bekes, Mar’09

Price Convergence in the European Union: Within Firms or Composition of Firms? – CEPII: Isabelle Méjean and Cyrille Schwellnus, Feb’09

The margins of multinational production and the role of intra-firm trade – CEPR: Alfonso Irarrazabal, Andreas Moxnes and Luca David Opromolla, Jan’09

Externally Published in: CEPR Discussion Paper 7145

2008

The Euro Effects on the Firm and Product-Level Trade Margins: Evidence from France – CEPII: Antoine Berthou and Lionel Fontagné, Oct’08

REPORTS

2012

From Genesis to Revelation: How firm-level data can change the way we think about economic policy – Carlo Altomonte and Gianmarco Ottaviano, Dec 2012 (The final report on the EFIGE project to the European Commission)

POLICY CONTRIBUTIONS

2011

Assessing competitiveness: how firm-level data can help – by Carlo Altomonte, Giorgio Barba Navaretti, Filippo di Mauro and Gianmarco Ottaviano

EUROPEAN POLICY BRIEFS

2012

EFIGE Policy Brief 4

EFIGE Policy Brief 3

2011

EFIGE Policy Brief 2

EFIGE Policy Brief 1

EFIGE COUNTRY REPORTS

2012

AUSTRIA – Austria Felix: The impact of the crisis on a small open economy – Luigia Mirella Campagna, Attilio Pasetto and Antonio Riti, Feb ’12

FRANCE – How does innovation affect the internationalisation pattern of firms? – Antoine Berthou and Jules Hugot, Feb’12

GERMANY – How did exporting firms cope with the crisis? – Katja Neugebauer and Julia Spies, Feb’12

HUNGARY – How did exporting firms cope with the crisis? – Gábor Békés, László Halpern, Miklós Koren and Balázs Muraközy, Feb ’12

ITALY – Investment in intangible assets and level of sophistication: the role of Italian firms’ financial structure – Silvia Cerisola, Elena D’Alfonso, Giulia Felice, Silvia Giannangeli and Daniela Maggioni, Feb’12

SPAIN – Did Spanish firms perform worse in the wake of the 2008 crisis? – Aránzazu Crespo, Klaus Desmet and Susanna Esteban, Feb’12

UNITED KINGDOM – UK firms, space and the crisis – Giordano Mion and Karen Helene Ulltveit-Moe, Feb’12

BLUEPRINTS

2012

Breaking down the barriers to firm growth in Europe: The fourth EFIGE policy report – by Loris Rubini, Klaus Desmet, Facundo Piguillem and Aránzazu Crespo

The triggers of competitiveness: The EFIGE cross-country report – by Carlo Altomonte, Tommaso Aquilante and Gianmarco I.P. Ottaviano, Jul’ 12

2011

Still standing: how European firms weathered the crisis – The third EFIGE policy report – Gábor Békés, László Halpern, Miklós Koren and Balázs Muraközy, Dec ’11

The global operations of European firms – The second EFIGE policy report – Daniel Horgos, Daniela Maggioni, Fabiano Schivardi, Giorgio Barba Navaretti, Matteo Bugamelli and Carlo Altomonte, Jul ’11

Related paper – Trade Responses in Europe: Is there anything we can infer from firm heterogeneity?, Giorgio Barba Navaretti, Matteo Bugamelli, and Fabiano Schivardi in “ECB Recovery and Beyond: Lessons for Trade Adjustment and Competitiveness”, chapter 15 (pp. 51-162), Apr ’11.

2009

Of markets,products and prices – Lionel Fontagné, Thierry Mayer and Gianmarco Ottaviano, Feb’09

2007

The happy few (EFIM project) – Thierry Mayer and Gianmarco I.P. Ottaviano, Nov’07