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“The buck stops with the executives”: Assessing the impact of workforce composition and cultural distance on French firms’ exports

Yves Jégourel , Raphaël Chiappini | November 13, 2020

This article analyzes the impact of firms' workforce composition on cultural distance and export performance. On the one hand, empirical literature has shown that there are dark trade costs that hinder trade performance, among which is cultural distance; on the other hand, the literature has shown that firms' export performance is positively correlated with employees’ qualifications. Using a unique database of 59,606 French firms, we reconcile these two streams of literature by estimating a structural gravity model. We demonstrate that hiring more executives decreases the negative impact of cultural distance and that firms with a higher share of executives have a higher probability of exporting and a higher level of recorded exports. As exporting involves practicing foreign languages or managing intercultural differences, firms with a greater reliance on skilled workers who exhibit this “export culture” have a higher probability of exporting, export more products and benefit from higher export values.