International trade in goods by enterprise characteristic

Data extracted in May-June 2017

Planned article update: November 2019

Highlights

In 2015, almost three fifths of the EU enterprises engaged in trade were importers only.

In 2015, foreign-owned enterprises accounted for 43 % of all EU imports.

Trade by enterprise characteristic, 2015
(% of enterprises engaged in trade)
Source: Eurostat (ext_tec06)

Globalisation patterns in EU trade and investment is an online Eurostat publication presenting a summary of recent European Union (EU) statistics on economic aspects of globalisation, focusing on patterns of EU trade and investment.

There has been a rapid expansion in the level of international trade in goods over the last few decades and trade in goods is viewed as one of the most important drivers of globalisation. Yet aside from a range of studies on relatively large, foreign-owned enterprises, little is published as regards the characteristics of those enterprises which trade across international borders; this subject is covered in more detail within this article.

Traditionally, international trade statistics have shown movements of goods between countries and by goods category, they have not provided explicit information as to the characteristics of those enterprises behind such trade flows. In a globalised world, this information is of particular interest to policymakers as they attempt to understand how economies are becoming increasingly interconnected.

Statistics on international trade in goods by enterprise characteristics

Statisticians have looked at using international trade in goods statistics in conjunction with business statistics to provide an enriched analysis of the characteristics of enterprises engaged in international trade, for example, providing information as to their economic activity or their size, the concentration of trade; this can help to identify differences between enterprises that trade internationally and those that do not. This has been made possible by linking microdata concerning international trade with business register information; note that only aggregated results are presented thereby protecting the confidential nature of this information.

The statistics used in this article were initially divided between enterprises which trade internationally and those enterprises which are active only within their domestic market: research has shown that international traders differ considerably from enterprises that operate solely within their domestic market. The group of international traders was then further subdivided into: importers, exporters and two-way traders (in other words, enterprises which both imported and exported).

Full article

Trade in goods by enterprise characteristics

In 2015, almost three fifths of the EU enterprises engaged in trade were importers only

Figure 1 presents aggregated information for the EU Member States detailing the composition of those enterprises that were engaged in trade. In 2015, almost three fifths (58.8 %) of EU enterprises engaged in trade were only importers, while just over a quarter (27.7 %) were two-way traders; the residual 13.6 % were only exporters. Importers are of interest to policymakers insofar as they facilitate access to new goods and services that were otherwise not easily available, whereas exporters are of interest due to their potential for job creation (that may be linked to economic growth that results from expanding into new markets).

The highest proportions of two-way traders were recorded for a range of different manufacturing activities that were often characterised by their global production chains

An analysis by NACE divisions reveals that there were considerable differences with respect to the make-up of those enterprises engaged in trade across different economic activities. Within the EU, the highest proportions of two-way traders were recorded for a wide range of different manufacturing activities, whereas for most services it was more commonplace to find that the largest proportion of enterprises engaged in trade were importers only. For example, there was a high share of two-way traders in 2015 within the highly competitive and globalised activities of pharmaceuticals (71.2 % of those enterprises engaged in trade were two-way traders), chemicals and chemical products (67.7 %) and motor vehicles, trailers and semi-trailers (66.5 %).

Figure 1: Trade by enterprise characteristic and by economic activity, EU-28, 2015
(% of enterprises engaged in trade)
Source: Eurostat (ext_tec06)

Figure 2 provides a similar set of information but for the individual EU Member States. One may imagine that in very small EU Member States, some enterprises may be forced to engage in trade in order to reach a minimum efficient scale of activity. Indeed, the highest share of two-way traders was recorded in Lithuania (where 43.0 % of all enterprises engaged in trade in 2015 were two-way traders), while two-way traders accounted for upwards of one third of all enterprises engaged in trade in Estonia, Slovenia, Luxembourg, the Czech Republic and Latvia; the United Kingdom also recorded a relatively high share (at 36.2 %). In contrast, the island nations of Malta (12.9 %) and Cyprus (13.2 %) recorded the lowest proportions of two-way traders, as around four fifths of their enterprises engaged in trade were importers only.

Figure 2: Trade by enterprise characteristic, 2015
(% of enterprises engaged in trade)
Source: Eurostat (ext_tec06)

Two-way traders accounted for an overwhelming share of the EU’s total trade in value terms

The information presented so far has related to an analysis of the number of enterprises engaged in trade; this is extended in Figure 3 to cover an analysis based on the total value of trade. The results are quite different and reveal that two-way traders accounted for the vast majority of total trade in value terms: across the EU, two-way traders accounted for 90.9 % of all goods traded in 2015. This would tend to suggest that a high proportion of importers only and exporters only tend to trade with relatively few countries and/or relatively few (low value) transactions, whereas two-way traders were more inclined to have a larger number of transactions and a wider range of trade partners.

A majority (18) of the individual EU Member States reported that in excess of 85 % of their total trade was accounted for by two-way traders, with the highest shares recorded in Germany (95.4 %) and Slovenia (94.1 %). At the other end of the range, in Cyprus (29.1 %) and Malta (48.0 %) the relative importance of two-way traders was much lower than in the other Member States and, once again, the share of total trade accounted for by importers only was considerably higher.

Figure 3: Value of trade by enterprise characteristic, 2015
(% of total)
Source: Eurostat (ext_tec06)

Concentration of international trade

A relatively high proportion of trade was concentrated in relatively few enterprises

Figure 4 examines more closely the proposition that a relatively high share of total trade might be accounted for by a small number of traders. Within this context, trade concentration is measured by the share of the top x traders in the value of total exports or imports. Across the EU Member States, the top five industrial traders accounted for 22.8 % of total exports (in value terms) in 2015, while the corresponding share for enterprises within distributive trades was somewhat lower (15.5 %).

An analysis based on the same concentration measure for imports reveals that trade was slightly more concentrated within the top five industrial enterprises (23.3 % of all imports), whereas there was less concentration for distributive trade, where the top five enterprises accounted for 11.4 % of the value of imported goods. This pattern — a higher concentration of trade for imports (compared with exports) for industrial enterprises and a higher concentration of trade for exports (compared with imports) for distributive trade enterprises — was repeated when analysing the results for different concentration measures (top 10, top 20, top 50 enterprises, etc.).

Figure 4: Value of trade by economic activity and by enterprise concentration, EU-28, 2015
(% share of total exports/imports accounted for by the top X enterprises)
Source: Eurostat (ext_tec02)

A similar analysis is presented in Figures 5 and 6 for the individual EU Member States; the first provides information on the concentration of trade for exports, while the latter provides comparable information for imports. Note that the results are broadly comparable for both exports and imports and hence only the former are described here.

As may be expected for some of the smaller EU Member States, almost the entirety (close to 99 %) of the total value of exports from Malta, Luxembourg and Cyprus could be attributed to the top 1 000 enterprises. By contrast, the concentration of trade was more diluted in several of the larger Member States. For example, the top 1 000 enterprises in Italy, the Netherlands and the Czech Republic accounted for approximately half of the total value of exports; this may reflect, among others, a high number of small and medium-sized enterprises (SMEs) within the enterprise population, or a relatively high propensity to trade in goods.

Figure 5: Value of exports by enterprise concentration, 2015
(% of total exports accounted for by the top X enterprises)
Source: Eurostat (ext_tec02)


Figure 6: Value of imports by enterprise concentration, 2015
(% of total imports accounted for by the top X enterprises)
Source: Eurostat (ext_tec02)

International trade by enterprise ownership

In 2015, foreign-owned enterprises accounted for 43.3 % of all EU imports

The final section of this article analyses the share of international trade by enterprise ownership, an area that is of considerable interest to policymakers when trying to establish the impact of globalisation on economic performance. Across 15 of the EU Member States (see Figure 7 for details of data coverage), foreign-owned enterprises accounted for 43.3 % of the total value of imports in 2015, which was approximately 13 percentage points higher than the share accounted for by domestically owned enterprises. The situation was quite different for exports insofar as those enterprises controlled by domestic owners accounted for 38.0 % of the total value of exports, which was less than a single percentage point higher than the share accounted for by foreign-owned enterprises (37.1 %).

In 2015, at least half of all imports in Slovakia (2014 data), Romania, Latvia (2014 data), the Czech Republic and the Netherlands was destined for enterprises controlled by foreign owners, while foreign-owned enterprises accounted for at least half of the total value of exports leaving Slovakia (2014 data), Romania and the Czech Republic.

Figure 7: Value of trade by enterprise ownership, 2015
(% of total)
Source: Eurostat (ext_tec07)

It is possible to extend this analysis by looking in more detail at those economic activities where foreign-owned enterprises tend to have a higher/lower share of total trade. Figure 8 shows some selected results for exports from three of the largest EU Member States — Germany, Spain and the United Kingdom. The most striking aspect is the relatively high share of the total value of exports in Germany and Spain that may be attributed to domestically owned enterprises, in contrast to the results for the United Kingdom, where it was commonplace for more than half of the total value of exports to be accounted for by foreign-owned enterprises. This pattern was particularly evident when comparing the results for the motor vehicles, trailers and semi-trailers industry, where domestically owned enterprises were responsible for 88.2 % of the total value of German exports in 2015, whereas in the United Kingdom this share was only 3.5 % of the total value of exports. The share of domestically owned enterprises was also very low in Spain (5.4 %), although this was atypical, as the electrical equipment industry was the only other activity to report that less than half of the total value of its exports were accounted for by domestically owned enterprises.

Figure 8: Value of exports by enterprise ownership, selected economic activities and EU Member States, 2015
(% of total)
Source: Eurostat (ext_tec07)
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