Firms and products in international trade: Evidence from Hungary

This paper provides a detailed description of Hungarian trade data and key patterns drawn at the firm and product level. In the Bernard et al. (2007) tradition, statistics describe the prevalence of trading activity, typology of firms by internationalisation, and concentration of trade volume within and across sectors both for exports and imports. There are several similarities as well as differences to key US and EU findings. Trade concentration in Hungary is slightly higher than in most European countries and foreign ownership and the role of foreign firms in trade is higher. Furthermore, firm heterogeneity is also studied in terms of traded products as well as partner countries. While the share of single-product exporters is similar to the US, there are certainly fewer Hungarian single-country exporters. With some transition-related differences, we find Hungarian trade activity to broadly match most open economy evidence. Throughout the paper, we use the IEHAS-CEFiG Hungary dataset, an almost universal panel of balance sheet information (1992-2006) merged with firm-product-country level customs data (1992-2003) taken until the 2004 EU accession.

Research highlights► We describe Hungarian trade patterns at the firm and product level for 1992-2004. ► Our focus is on prevalence of trading activity, typology of firms and concentration. ► Firm heterogeneity matters in terms of traded products as well as partner countries. ► We find trade activity to match US, EU but with some transition related difference. ► Share of multi-product firms was stable over time, but number of varieties rose.