Open Access Journal Article

Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression

by Joachim Wagner a,*
a
Kiel Centre for Globalization, Leuphana Universität Lüneburg, Lüneburg, Germany
*
Author to whom correspondence should be addressed.
EAL  2025 4(1):74; https://doi.org/10.58567/eal04010003
Received: 19 May 2024 / Accepted: 10 December 2024 / Published Online: 30 December 2024
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Abstract

The use of digital technologies like artificial intelligence, robotics, or smart devices can be expected to go hand in hand with higher productivity and lower trade costs, and, therefore, to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union to shed further light on this issue by investigating the link between the digitalization intensity of a firm and extensive margins of exports. We use a new machine-learning based regression method, Kernel-Regularized Least Squares (KRLS), which effectively handles non-linear relationships in models and does not impose any restrictive assumptions for the functional form of the relation between margins of exports, digitalization intensity, and any control variables. We find that firms which use more digital technologies do more often export, do more often export to various destinations all over the world, and do export to more different destinations.

Keywords: Digital Technologies; Exports; Firm Level Data; Flash Eurobarometer 486; Kernel-Regularized Least Squares (KRLS);
Copyright: © 2024 by Wagner. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Wagner, J. Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression. Economic Analysis Letters, 2025, 4, 74. https://doi.org/10.58567/eal04010003
AMA Style
Wagner J. Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression. Economic Analysis Letters; 2025, 4(1):74. https://doi.org/10.58567/eal04010003
Chicago/Turabian Style
Wagner, Joachim 2025. "Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression" Economic Analysis Letters 4, no.1:74. https://doi.org/10.58567/eal04010003
APA style
Wagner, J. (2025). Digitalization Intensity and Extensive Margins of Exports in Manufacturing Firms from 27 EU Countries - Evidence from Kernel-Regularized Least Squares Regression. Economic Analysis Letters, 4(1), 74. https://doi.org/10.58567/eal04010003

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