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CNB > Economic research > Research publications > CNB Working paper series > 2016 > Margins of Trade: Czech Firms Before, During and After the Crisis

Margins of Trade: Czech Firms Before, During and After the Crisis

Kamil Galuščák, Ivan Sutóris

We investigate the extensive and intensive margins of trade of Czech firms in periods before, during and after the crisis of 2008–2009. The intensive margin explains most of the aggregate export growth in 2006–2014, which corroborates previous findings for other countries. The contribution of the extensive margin is smaller, explaining on average 39% of the aggregate export growth in 2006–2007 and around 25% to 30% of that in the post-crisis period. The lower contribution of the extensive margin may signal a lower rate of convergence of the Czech economy. The results indicate that the crisis had a more severe impact on small exporting firms and that exports to countries outside the EU gained more prominence in the post-crisis years. Our results are similar to findings from previous studies on the impact of participation in global value chains on firms’ trade. Specifically, a more negative impact of the crisis was observed for exports with higher import intensity. Overall, our results point to the importance of using disaggregated data in the analysis of countries’ export performance.

JEL codes: F02, F20, G01

Keywords: Exports, firms’ heterogeneity, global crisis, intensive and extensive margins, production chains

Issued: December 2016

Download: CNB WP No. 12/2016 (pdf, 484 kB)