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The Exporter Productivity Premium along the Productivity Distribution: First Evidence from a Quantile Regression Approach for Fixed Effects Panel Data Models

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  • Powell, David

    ()
    (RAND)

  • Wagner, Joachim

    ()
    (Leuphana University Lüneburg)

Abstract

An emerging literature on international activities of heterogeneous firms documents that exporting firms are more productive than firms that only sell on the national market. This positive exporter productivity premium shows up in a large number of empirical studies after controlling for observed and unobserved firm characteristics in regression models including firm fixed effects. These studies test for a difference in productivity between exporters and non-exporters at the conditional mean of the productivity distribution. However, if firms are heterogeneous, it is possible that the size of the premium varies over the productivity distribution. In this paper we apply a newly developed estimator for fixed-effects quantile regression models to estimate the exporter productivity premium at quantiles of the productivity distribution for manufacturing enterprises in Germany, one of the leading actors in the world market for goods. We show that the premium decreases over the quantiles – a dimension of firm heterogeneity that cannot be detected through mean regression.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5112.

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Length: 20 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5112

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Keywords: exporter productivity premium; quantile regression; fixed effects;

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  1. Yasar, Mahmut & Morrison Paul, Catherine J., 2007. "International linkages and productivity at the plant level: Foreign direct investment, exports, imports and licensing," Journal of International Economics, Elsevier, vol. 71(2), pages 373-388, April.
  2. Chad Syverson, 2010. "What Determines Productivity?," NBER Working Papers 15712, National Bureau of Economic Research, Inc.
  3. The International Study Group on Exports and Productivity, 2007. "Exports and productivity - comparable evidence for 14 countries," Policy Research Working Paper Series 4418, The World Bank.
  4. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," Working Papers 05-11, Center for Economic Studies, U.S. Census Bureau.
  5. Nick Bloom & John Van Reenen, 2010. "Why do management practices differ across firms and countries?," LSE Research Online Documents on Economics 47491, London School of Economics and Political Science, LSE Library.
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  7. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521608275, October.
  8. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  9. Gamper-Rabindran, Shanti & Khan, Shakeeb & Timmins, Christopher, 2010. "The impact of piped water provision on infant mortality in Brazil: A quantile panel data approach," Journal of Development Economics, Elsevier, vol. 92(2), pages 188-200, July.
  10. Francesco Serti & Chiara Tomasi, 2009. "Self-selection along different export and import markets," LEM Papers Series 2009/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  11. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages F134-F161, 02.
  12. Anna Maria Falzoni & Mara Grasseni, 2005. "Home Country Effects of Investing Abroad: Evidence from Quantile Regressions," KITeS Working Papers 170, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2005.
  13. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
  14. Mahmut Yasar & Carl H. Nelson & Roderick Rejesus, 2003. "Productivity and Exporting Status of Manufacturing Firms: Evidence from Quantile Regressions," Emory Economics 0323, Department of Economics, Emory University (Atlanta).
  15. International Study Group on Exports and Productivity (ISGEP), 2008. "Understanding Cross-Country Differences in Exporter Premia: Comparable Evidence for 14 Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 596-635, December.
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