Job creation , job destruction and fi rms ’ international trade involvement by Mauro Pisu

Statement of purpose: The purpose of these working papers is to promote the circulation of research results (Research Series) and analytical studies (Documents Series) made within the National Bank of Belgium or presented by external economists in seminars, conferences and conventions organised by the Bank. The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium. Abstract One of the most important predictions made in recent international trade literature based on heterogeneous firms concerns the within-industry job reallocation from firms not involved in international markets to those that are. This paper quantifies the extent of this reallocation using a dataset of Belgian manufacturing firms from 1998 to 2004 providing information on their international trading activities. The results suggest that, at three-digit industry levels, the shifts in employment between firms having different trading status account for 6 to 30 percent of total job reallocation. This effect is stronger for large than for small firms. Acknowledgments: I am very grateful to Luc Dresse, Catherine Fuss, participants at the conference on "Labour Markets Dynamics and Growth" held at the University of Aarhus, Denmark, and the seminar at the KOF in Zurich for their helpful comments and suggestions. I would also like to thank George van Gastel, Jean-Marc Troch and the Microeconomic Analysis Service team of the National Bank of Belgium for their invaluable help with the construction of the dataset.