Working paper

Europe's exports superstar - it's the organisation!

What explains Germany’s superb export performance? Is Germany’s export behaviour very distinct compared to other European countries?

Publishing date
14 July 2015
Authors
Dalia Marin

The authors explore the organisational responses to competition of 14,000 exporting firms in seven European countries. The paper examines the export business model of the median exporter and of the top one percent exporters in each country, accounting for 20 percent to 55 percent of total exports.

What do these firms do to become superstars? The authors find, first, that the export market share of the median exporter in each of the countries to the world more than tripled (in some cases the export market share increases tenfold) for firms that combine decentralised management with offshoring of production to low-wage countries. Exporters which abstain from any organisational adjustment do very badly. Decentralised 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 price. 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 decentralised management has provided incentives for quality in these countries. Third, Germany’s exports are less vulnerable to price increases, while exports from France and Italy respond strongly to price changes, and thus costs reductions via offshoring benefits these countries most.

About the authors

  • Dalia Marin

    Dalia Marin joined Bruegel as a research fellow in October 2007. She holds the Chair in International Economics at the University of Munich.

    Her research interests are in the area of international economics, corporate finance and the organisation of the firm, and emerging market economies.

    Since obtaining her Habilitation in Economics from Vienna University of Economics she has been an Assistant Professor at the Institute for Advanced Studies in Vienna, Associate Professor at Humboldt University Berlin, and a visiting professor or visiting scholar at Harvard University, Stanford University, Stern School of Business, New York University, the International Monetary Fund, National Bureau of Economic Research in Massachusetts, the European University Institute, and at the Wissenschaftszentrum in Berlin.

    Dalia Marin is also a fellow of the Centre for Economic Policy Research (CEPR), London, and Member of the International Trade and Organization Working Group of the National Bureau of Economic Research (NBER) in Cambridge. She has been Team Leader at the Russian European Center for Economic Policy in Moscow and has acted as a consultant for international organizations such as the European Bank for Reconstruction and Development, and the International Monetary Fund.

     

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