Bundling and exporting: evidence from German SMEs

Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.
Published on 01 March 2019

Staff Working Paper No. 781

By Tommaso Aquilante and Ferran Vendrell-Herrero

This paper studies the effect of bundling products and services on the export performance of firms. Using a unique sample, we document several facts about German small and medium enterprises (SMEs). First, bundling is a relatively rare activity, which is unevenly spread across sectors. Second, SMEs that bundle products and services are more productive than those selling products and services separately. Third, these firms tend to be more internationally oriented. While most of the existing literature focuses on large firms, we contribute to the literature by uncovering a robust positive relation between product-service bundling and exporting in SMEs. Importantly, the competitiveness-enhancing effect of bundling goes beyond manufacturing, affecting non-manufacturing firms also. To mitigate endogeneity concerns, we exploit the panel structure of the data and implement several (doubly robust) propensity score matching techniques.

PDFBundling and exporting: evidence from German SMEs

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