International Trade and the Servitization of Manufacturing: Evidence from German Micro Data

This paper examines the impact of the increasing trade intensity and exposure on the employment structure of establishments in the German manufacturing sector. To identify the causal relationship between trade openness and the occupation-skill mix within establishments, we use the "Establishment History Panel" (in German: Betriebs-Historik Panel (BHP)) provided by the German Federal Employment Office, a very rich and detailed micro data set that covers all establishments in Germany between 1975 and 2010. To capture the openness to international trade, we match the BHP with sectoral trade data on the basis of the actual composition of production and consumption of the German manufacturing industries that we derive from statistics provided by the German Federal Statistical Office.