KCG Fellows Presented Research at the European Trade Study Group Conference in Warsaw

© Hinz, Kroeger

KCG researchers Dr. Julian Hinz and Thilo Kroeger joined the 20th Annual Conference of the European Trade Study Group on September 13-15, 2018 in Warsaw, Poland. The conference is as of now the largest annual conference on international trade in the world. It provides an ideal platform for trade scholars to present their up-to-date research results and progress and to exchange knowledge and insights with other experts in the field.

Hinz presented his work entitled “Bias-corrected Fixed Effects Panel Estimation of the Extensive Margin of Trade” co-authored with Joschka Wanner (University of Bayreuth) which shows how a fixed effects logit estimator with exporter-time, importer-time, and country pair fixed effects can be implemented for large panel data sets via an iteratively re-weighted least squares procedure for generalized linear models. The authors suggest the use of this procedure to overcome shortcomings of estimates of the determinants of the extensive margin of trade. The previous estimates did not take into account bilateral unobserved heterogeneity for two reasons: (i) the large number of required fixed effects precludes the practical implementation of appropriate specifications and (ii) even if estimates could be obtained, they would suffer from an incidental parameter problem.

Kroeger presented ongoing research co-authored with Dominik Boddin (Kiel University). The project “The Servitization of German Manufacturing” is concerned with the ongoing structural transformation of industrialized countries. By exploiting a unique dataset of matched employer-employee data containing information on workers, their exact occupation, and their employer, the authors provide new stylized facts and document consequences of the structural change in Germany. They find that in addition to declining production employment at the sectoral level, structural change also affects the intensive margin: The fraction of workers performing manufacturing occupations within establishments declines in the manufacturing sector. This servitization at the establishment level has implications for inequality: Workers employed at more servitized firms earn less than their counterparts working for less servitized firms. Additionally, preliminary results suggest a causal relationship between increasing service shares and within-establishment inequality.