Self-Selection into Export Markets byBusiness Services Firms: Evidence fromFrance, Germany and the United Kingdom

This study reports results from an empirical investigation of business services sector firmsthat (start to) export, comparing exporters to firms that serve the national market only. Weestimate identically specified empirical models using comparable enterprise level data fromFrance, Germany, and the United Kingdom. Exporters are more productive and pay higherwages on average in all three countries. Results for profitability differ across borders –profitability of exporters is significantly smaller in Germany, significantly larger in France, anddoes not differ significantly in the UK. The results for wages and productivity hold in the yearsbefore the export start, which indicates self-selection into exporting of more productiveservices firms that pay higher wages. The surprising finding of self-selection of less profitableGerman business services firms into exporting does not show up among firms from Franceand the UK where no statistically significant relationship between profitability and starting toexport is found....