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Trade Liberalization And Firm Productivity: Estimation Methods Matter

Author

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  • John Kealey
  • Pau S. Pujolas
  • César Sosa‐Padilla

Abstract

In this paper, we show that the relationship between trade liberalization and firm productivity is sensitive to the method used to estimate the production function. We estimate the productivity of Colombian manufacturing plants using the methods of Levinsohn and Petrin, Ackerberg et al., and Gandhi et al. and at times come to surprisingly different conclusions about firm productivity growth after the liberalization. Results from a growth decomposition exercise and from a quantile regression model reinforce the dissimilarity of results across methods. (JEL F13, 14, D24, C14)

Suggested Citation

  • John Kealey & Pau S. Pujolas & César Sosa‐Padilla, 2019. "Trade Liberalization And Firm Productivity: Estimation Methods Matter," Economic Inquiry, Western Economic Association International, vol. 57(3), pages 1272-1283, July.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:3:p:1272-1283
    DOI: 10.1111/ecin.12767
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    Cited by:

    1. Sampi Bravo,James Robert Ezequiel & Jooste,Charl & Vostroknutova,Ekaterina, 2021. "Identification Properties for Estimating the Impact of Regulation on Markups and Productivity," Policy Research Working Paper Series 9523, The World Bank.
    2. Weilin Liu, 2022. "Did Trade Liberalization Boost Total Factor Productivity Growth in Manufacturing in India in the 1990s?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 43, pages 110-139, Fall.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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