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Are Non-Exporters Locked out of Foreign Markets because of Low Productivity?: Evidence from New Zealand Agriculture and Forestry

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  • Kris Iyer

    ()
    (Ministry of Economic Development, Government of New Zealand)

  • Philip Andrew Stevens

    ()
    (Ministry of Economic Development, Government of New Zealand)

  • Darran Austin

    ()
    (Ministry of Agriculture and Forestry, Government of New Zealand)

Abstract

Self-selection of productive firms to exporting suggests that non-exporters are less productive and locked out of international markets due to low productivity. Using a panel dataset of 88,752 New Zealand agriculture and forestry sector firms over the period 2000-07, this paper measures the productivity of exporters and non-exporters separately. The paper finds that exporters are, on average, twice as productive as non-exporters. Across both exporters and non-exporters, we report a mixed rate of productivity growth: negative until the median and positive beyond. Exporters record a higher negative growth rate relative to non-exporters (below the median) and also a higher positive growth rate (beyond the median). Analysis of the productivity distribution in quantiles suggests that the sub-set of non-exporters who have productivity levels similar to that of exporters is large. For this sub-set of firms, it would be erroneous to conclude that the export propensity decision is determined by low productivity.

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File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I2-P155.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 30 (2010)
Issue (Month): 2 ()
Pages: 1694-1709

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Handle: RePEc:ebl:ecbull:eb-10-00168

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Keywords: agriculture; forestry; productivity; New Zealand;

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  1. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, Elsevier, vol. 67(2), pages 373-391, December.
  2. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, Elsevier, vol. 73(1), pages 69-98, September.
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