Abstract - Does Export Openness Increase Firm-Level Volatility?

Greater export openness affects firm-level volatility by changing the exposure and the reaction of firms to macroeconomic shocks. The net effect is ambiguous from a theoretical point of view, though. This paper provides firm-level evidence on the link between openness and volatility. Using two novel datasets on German firms, we analyze the evolution of firm-level output volatility and the link between volatility and export openness. We find that firm-level output volatility displays patterns similar to those found in aggregated data for Germany. Also, smaller firms and firms that grow faster are more volatile. Increased export openness tends to lower volatility.
(joint work with Jörg Döpke and Harald Strotmann)

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