Abstract
This paper uses a new tailor-made data set to investigate the differences in extensive and intensive margins of exports in manufacturing firms from East Germany and West Germany. It documents that these margins do still differ in 2010, 20 years after the re-unification of Germany. West German firms outperform East German firms at all four margins of exports – they have a larger propensity to export, export a larger share of total sales, export more goods and export to a larger number of countries. All these differences are large from an economic point of view. A decomposition analysis shows that in 2010 between 59 percent and 78 percent of the difference in margins can be explained by differences in firm characteristics.
Acknowledgements
All computations were done at the Research Data Centre of the Statistical Office of Berlin-Brandenburg in Berlin. The firm-level data used are strictly confidential but not exclusive; see http://www.forschungsdatenzentrum.de/datenzugang.asp for information on how to access the data. To facilitate replications the Stata do-file used is available from the author on request. I thank two anonymous referees and the editor, Werner Smolny, for comments on an earlier version that helped to improve the paper considerably. Many thanks to Paul Simon for his inspiration for the title of the paper (see: http://en.wikipedia.org/wiki/Still_Crazy_After_All_These_Years_%28song%29).
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