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Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms
Author(s) -
Girma Sourafel,
Greenaway Avid,
Kneller Richard
Publication year - 2004
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2004.00486.x
Subject(s) - productivity , matching (statistics) , sunk costs , economics , industrial organization , contrast (vision) , panel data , production (economics) , microeconomics , monetary economics , international trade , econometrics , macroeconomics , statistics , mathematics , artificial intelligence , computer science
Exporting involves sunk costs, so some firms export whilst others do not. This proposition derives from a number of models of firm behavior and has been exposed to microeconometric analysis. Evidence from the latter suggests that exporting firms are generally more productive than nonexporters. They self‐select, in that they are more productive before they enter export markets, but the evidence suggests that entry does not make them any more productive. This paper investigates exporting and firm performance for a large panel of UK manufacturing firms, applying matching techniques. The authors find that exporters are more productive and they do self‐select. In contrast to other evidence, however, exporting further increases firm productivity.