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Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations

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  • Vincenzo Verardi
  • Joachim Wagner

Abstract

This paper makes three contributions. (1) It summarizes in tabular form a recent literature made of 36 micro-econometric studies for 16 different countries on the relationship between export destination and firm performance. (2) It reports estimates of the productivity premium of German firms exporting to the Euro-zone and beyond, controlling for unobserved time invariant firm specific effects, and tests for self-selection of more productive firms into exporting beyond the Euro-zone. (3) It corrects a serious flaw in hitherto published studies that ignore the potentially disastrous consequences of extreme observations, or outliers. The paper shows that estimates of the exporter productivity premium by destination are driven by a small share of outliers. Using a "clean" sample without outliers the estimated productivity premium of firms that export to the Euro-zone only is no longer much smaller that the premium of firms that export beyond the Euro-zone, too, and the premium itself over firms that serve the German market only is tiny. Furthermore, an ex-ante differential that is statistically significant and large only shows up for enterprises that exported to the Euro-zone already and start to export to countries outside the Euro-zone. These conclusions differ considerably from those based on non-robust standard regression analyses.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 35 (2012)
Issue (Month): 6 (06)
Pages: 694-712

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Handle: RePEc:bla:worlde:v:35:y:2012:i:6:p:694-712

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References

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Citations

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Cited by:
  1. Adriana Peluffo & Juan Barboni & Nicolás Ferrari & Hanna Melgarejo, 2013. "Exports and productivitgy: does destination matter?," Documentos de Trabajo (working papers) 13-06, Instituto de Economía - IECON.
  2. Yama Temouri & Joachim Wagner, 2013. "Do outliers and unobserved heterogeneity explain the exporter productivity premium? Evidence from France, Germany and the United Kingdom," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 278, University of Lüneburg, Institute of Economics.
  3. Joachim Wagner, 2012. "New Methods for the Analysis of Links between International Firm Activities and Firm Performance: A Practitioner’s Guide," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 227, University of Lüneburg, Institute of Economics.
  4. Neil Foster-McGregor & Anders Isaksson & Florian Kaulich, 2013. "Importing, Exporting and Performance in Sub-Saharan African Manufacturing Firms," wiiw Working Papers, The Vienna Institute for International Economic Studies, wiiw 96, The Vienna Institute for International Economic Studies, wiiw.
  5. Ciżkowicz, Piotr & Kowalczuk, Michał & Rzońca, Andrzej, 2014. "Heterogeneous determinants of local unemployment in Poland," MPRA Paper 56858, University Library of Munich, Germany.
  6. Joachim Wagner, 2011. "From Estimation Results to Stylized Facts Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms," De Economist, Springer, Springer, vol. 159(4), pages 389-412, December.
  7. Achim Schmillen, 2011. "The Exporter Wage Premium Reconsidered Destinations, Distances and Linked Employer-Employee Data," Working Papers, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) 305, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  8. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 148(2), pages 235-267, June.
  9. Jerzy Cieślik & Eugene Kaciak & Dianne Welsh, 2012. "The impact of geographic diversification on export performance of small and medium-sized enterprises (SMEs)," Journal of International Entrepreneurship, Springer, Springer, vol. 10(1), pages 70-93, March.
  10. Alexander Vogel & Joachim Wagner, 2011. "Robust estimates of exporter productivity premia in German business services enterprises," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 207, University of Lüneburg, Institute of Economics.
  11. Biewen, Martin & Weiser, Constantin, 2011. "A New Approach to Testing Marginal Productivity Theory," IZA Discussion Papers 6113, Institute for the Study of Labor (IZA).

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