Export Premia and Sub-Contracting Discount. Passive Strategies and performance in Domestic and Foreign Markets
AbstractThis paper contributes to the literature on firms’ productivity and exporting decisions by analysing the role played by organizational choice aspects. Rather than setting up a vertically integrated structure, manufacturers may act as subcontractors in both domestic and foreign markets, and produce to satisfy the requirements of other firms. A very simple model is presented where the most productive firms self-select into exporting, while the least productive ones work as sub-contractors serving the domestic market only. These predictions are tested using a sample of Italian firms observed in the 1998-2003 period. The results of our estimates highlight a ranking of firms consistent with a priori expectations, and provide a clear indication that passive exporters (i.e. using sub-contracting in foreign markets)display lower TFP values as compared to direct exporters. Moreover, only the latter category exhibits higher pre-entry productivity levels and growth rates as well as higher post-entry TFP growth rates. Such findings are consistent with both the self-selection hypothesis and the learning by exporting explanation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 237.
Date of creation: 07 Jan 2008
Date of revision:
Export Premia; Sub-contracting Discount; Total Factor Productivity; Firm Heterogeneity;
Other versions of this item:
- Tiziano Razzolini & Davide Vannoni, 2011. "Export Premia and Subcontracting Discount: Passive Strategies and Performance in Domestic and Foreign Markets," The World Economy, Wiley Blackwell, vol. 34(6), pages 984-1013, 06.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Davide Castellani & Giorgia Giovannetti, 2009.
"Productivity and the international firm: dissecting heterogeneity,"
Development Working Papers
270, Centro Studi Luca d\'Agliano, University of Milano.
- Davide Castellani & Giorgia Giovannetti, 2010. "Productivity and the international firm: dissecting heterogeneity," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 13(1), pages 25-42.
- Davide Castellani & Giorgia Giovannetti, 2010. "Productivity and the international firm: dissecting heterogeneity," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 25-42.
- Mariarosaria Agostino & Jeffrey B. Nugent & Domenico Scalera & Francesco Trivieri & Anna Giunta, 2011. "Firm Productivity, Organizational Choice and Global Value Chain," Working Papers 2011R09, Basque Institute of Competitiveness.
- Holger Breinlich & Alessandra Tucci, 2011.
"Foreign market conditions and export performance: does `crowdedness' reduce exports?,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 44(3), pages 991-1019, August.
- Breinlich, Holger & Tucci, Alessandra, 2010. "Foreign Market Conditions and Export Performance: Does 'Crowdedness' Reduce Exports?," CEPR Discussion Papers 7975, C.E.P.R. Discussion Papers.
- Daniela Federici & Valentino Parisi, 2012.
"Corporate Taxation and Exports,"
2012-01, Universita' di Cassino, Dipartimento di Scienze Economiche.
- Bratti, Massimiliano & Felice, Giulia, 2009. "Exporting and Product Innovation at the Firm Level," MPRA Paper 18915, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chiara Elli).
If references are entirely missing, you can add them using this form.