Job Creation of Exporters and Non-exporters: Evidence from Estonia

Abstract

This chapter aims to find out how many and which types of jobs Estonian born globals, other exporters and non-exporters have created and how many and which types of jobs they have destroyed. Based on firm-level data from the Estonian Commercial Registry, Statistics Estonia and the Estonian Tax and Customs office, it shows that non-exporters had the highest job creation and hiring rates, while born globals’ rates were much lower. On the other hand, non-exporters also had the highest job destruction and separation rates. While in absolute terms, fast internationalizers (including born globals) were the most active in job creation and, in general, they were also larger than other firms, the latter managed to grow the most in percentage terms as they were very small in the beginning. We also found that born globals had the highest wage costs per employee and that fast internationalizers’ overall survival and export survival rates were higher than other firms’ rates. Consequently, although born globals’ net job reallocation and job flow rates were not always positive, their contribution in terms of creating more high-paid jobs should not be underestimated.