Productivity and Trade Orientation in UK Manufacturing
AbstractWe show that improvements in aggregate productivity in UK manufacturing during the first years after the implementation of the Euro, by the UK's main trading partners in Europe, are determined by both market share reallocation and within-company productivity growth. Furthermore, we outline a structural methodology for estimating parameters of a production function linking the unobservable productivity to endogenous company-level trade orientation, investment and exit decisions. This allows us to back out consistent and unbiased estimates of productivity dynamics by trade orientation of companies within four-digit UK manufacturing industries using FAME data over the period 1994-2001. Our estimates of productivity dynamics indicate that improvements in aggregate productivity were mainly driven by market share reallocations away from inefficient and towards efficient exporting companies alongside productivity improvements within non-exporting companies. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2009.
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Bibliographic InfoArticle provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.
Volume (Year): 71 (2009)
Issue (Month): 6 (December)
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Other versions of this item:
- Rizov, Marian & Walsh, Patrick Paul, 2007. "Productivity and Trade Orientation in UK Manufacturing," IZA Discussion Papers 2808, Institute for the Study of Labor (IZA).
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
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