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Productivity and International Trade - firm-level evidence from a small open economy

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Author Info
Andersson, Martin () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Johansson, Sara () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Lööf, Hans () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

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Abstract

This paper presents a comprehensive description and analysis of the international trading activities of firms based on novel detailed Swedish data. As a small open economy with a limited domestic market, Sweden constitutes an interesting contrast to existing evidence. We show that much of the stylized facts from large countries (specifically the US) about firms’ participation in international trade also pertain to a small open economy. We provide robust evidence of selection operating from market to market which is consistent with that low productive firms are confined to markets with low productivity thresholds. We further show that selection also applies to number of products traded. Both export and import productivity premiums increase in number of markets and number of products traded, respectively. There is a substantial heterogeneity among exporters and importers in terms of the number of markets they trade with and in terms of the number of products they trade.

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File URL: http://www.infra.kth.se/cesis/documents/WP99.pdf
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Publisher Info
Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 99.

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Length: 33 pages
Date of creation: 03 Oct 2007
Date of revision:
Handle: RePEc:hhs:cesisp:0099

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Related research
Keywords: international trade exports imports firm heterogeneity productivity import premium export premium

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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This page was last updated on 2008-7-5.


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