Euro, firm size and export behavior
ISSN: 1988-8767
Year of publication: 2008
Issue: 431
Type: Working paper
More publications in: Notas técnicas: [continuación de Documentos de Trabajo FUNCAS]
Abstract
This paper provides a first attempt to assess the impact of the euro on the relationship between firm size and exports. We extend previous new-new trade theory models to derive some hypotheses that are tested using a representative sample of Spanish manufacturing firms. The results indicate that the introduction of the euro has remarkably weakened the role of firm size in the decision to export to the Eurozone. Moreover, the change in the proportion of exports to the Eurozone is negatively related to firm size. Our results suggest that the euro adoption has reduced the threshold size in order to export to Eurozone countries.