Exporters, Importers and Two-way traders: The links between internationalization, employment and wages

Francesco Serti, University of Alicante
Chiara Tomasi, University of Urbino and LEM Pisa
Antonello Zanfei, University of Urbino

Abstract

How are trade activities related to firms’ employment and wages structures? Using firm level data on Italian manufacturing firms, we look at the relationship between the degree involvement in international trade and workforce composition and wages. This paper adds to the existing literature in two ways. Firstly, we dierentiate firms that only export from firms that only import and from those involved in both trading activities - namely two-way traders. We show that two- way traders have a higher propensity to employ non-production workers, exhibit significant wage gaps, but also pay higher wages for both production and non production workers, relative to non internationalized firms and to firms which are involved only in either export or import. Secondly, the paper also looks at how the wage and employment structure of trading firms changes with the country of destination and origin of trade flows. JEL codes: F10, F16, J21