Agglomeration Premium and Trading Activity of Firms

Firms may benefit from proximity to each other due to the existence of several externalities. The productivity premia of firms located in agglomerated regions an be attributed to savings and gains from external economies. However, the capacity to absorb information may depend on activities of the firm, such as involvement in international trade. Importers, exporters and two-way traders are likely to employ a different bundle of resources and be organised differently so that they would appreciate inputs and information from other firms in a different fashion and intensity. Getting a better understanding of such external economies by looking at various types of firms is the focus of present paper. Using Hungarian manufacturing data from 1992-2003, we confirm that firms perform better in agglomerated areas and show that traders gain more in terms of productivity than non-traders when agglomeration rises. Firms that are stable participants of international trade gain 16 % in terms of total factor productivity growth as agglomeration doubles while non-traders may not benefit from agglomeration at all. Results also suggest that traders' productivity premium is most apparent in urbanised economies.agglomeration, international trade, firm heterogeneity

Firms and Products in International Trade: Data and Patterns for Hungary

This paper provides a detailed description of Hungarian trade data and key patters drawn at the firm and product level. The IEHAS-CEFiG Hungary dataset is an almost universal panel of balance sheet information (1992-2006) merged with firmproductcountry level customs data (1992-2003) taken until the 2004 EU accession. In the Bernard et al. (2007) tradition, statistics describe the prevalence of trading activity, typology of firms by internationalisation, concentration of trade volume within and across sectors as well as geographical features of activities. The aim of this paper is both to offer background statistics to existing studies and to stimulate future research on firms and trade by offering a great deal of descriptive statistics. After describing datasets, the prevalence of trading activity across sectors, concentration of trading volume across and within sectors, spatial distribution on trade and principal trading partners are described. Stylised facts show that trading activity is heavily concentrated, both exporters and importers show better performance than non-traders, and multi-product and multi-county firms are responsible for the bulk of trade volume.international trade, exporting, firm-product level data