Working Paper

Exporters of Services: A Look at U.S. Exporters Outside of the Manufacturing Sector

Abstract: Using transaction data for the U.S., this paper presents a series of stylized facts on exporters in services industries. We find that most of the basic facts on manufacturing exporters extend to the services sectors with three important differences. First, the participation rate of services firms in foreign markets is much lower than that of manufacturing firms. Second, the size premia at services exporters are significantly higher than those among manufacturers. Third, the survival rates of services exporters tend to be lower than that of manufacturing exporters. All three facts are compatible with the hypothesis that firms in services sectors face larger trade costs. A simple calibration suggests that services firms face two-to-three-time higher fixed costs than manufacturing exporters.

Keywords: Exporters of services; extensive and intensive margins; Firm heterogeneity; Trade costs;

JEL Classification: F14;

https://doi.org/10.17016/FEDS.2019.063

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2019-08

Number: 2019-063

Pages: 31 pages