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Exports and Productivity Growth - First Evidence from a Continuous Treatment Approach

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Author Info
Helmut Fryges (Centre for European Economic Research (ZEW))
Joachim Wagner () (University of Lueneburg and Max Planck Institute of Economics)

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Abstract

A recent survey of 54 micro-econometric studies reveals that exporting firms are more productive than non-exporters. On the other hand, previous empirical studies show that exporting does not necessarily improve productivity. One possible reason for this result is that most previous studies are restricted to analysing the relationship between a firm's export status and the growth of its labour productivity, using the firms' export status as a binary treatment variable and comparing the performance of exporting and non-exporting firms. In this paper, we apply the newly developed generalised propensity score (GPS) methodology that allows for continuous treatment, that is, different levels of the firms' export activities. Using the GPS method and a large panel data set for German manufacturing firms, we estimate the relationship between a firm's export-sales ratio and its labour productivity growth rate. We find that there is a causal effect of firms' export activities on labour productivity growth. However, exporting improves labour productivity growth only within a sub-interval of the range of firms' export-sales ratios.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers in Economics with number 2007-063.

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Date of creation: 12 Sep 2007
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Handle: RePEc:jrp:jrpwrp:2007-063

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Related research
Keywords: Export-sales ratio; labour productivity; continuous treatment; dose-response function;

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Find related papers by JEL classification:
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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  1. Aitken, B. & Hanson, G.H. & Harrison, A.E., 1994. "Spillovers, Foreign Investment and Export Behavior," Papers 95-06, Columbia - Graduate School of Business.
    Other versions:
  2. Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707, December. [Downloadable!] (restricted)
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  3. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September. [Downloadable!]
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  4. Wagner, Joachim, 2002. "The causal effects of exports on firm size and labor productivity: first evidence from a matching approach," Economics Letters, Elsevier, vol. 77(2), pages 287-292, October. [Downloadable!] (restricted)
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  5. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September. [Downloadable!] (restricted)
  6. Wagner, Joachim, 2001. " A Note on the Firm Size-Export Relationship," Small Business Economics, Springer, vol. 17(4), pages 229-37, December. [Downloadable!] (restricted)
  7. Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August. [Downloadable!] (restricted)
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  9. Fryges, Helmut, 2006. "The Export-Growth Relationship: Estimating a Dose-Response Function," ZEW Discussion Papers 06-28, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  10. Eric J. Bartelsman & Mark Doms, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September. [Downloadable!] (restricted)
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  11. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(1), pages 134-157, March. [Downloadable!] (restricted)
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  12. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Blackwell Publishing, vol. 30(1), pages 60-82, 01. [Downloadable!] (restricted)
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  13. Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 30(1), pages 173-187, March. [Downloadable!] (restricted)
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  17. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 605-628, December. [Downloadable!] (restricted)
  18. Joachim Wagner, 2006. "International Firm Activities and Innovation: Evidence from Knowledge Production Functions for German Firms," Papers on Entrepreneurship, Growth and Public Policy 2006-15, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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  19. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Blackwell Publishing, vol. 12(5), pages 855-866, November. [Downloadable!] (restricted)
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  22. Robert M Grant, 1987. "Multinationality and Performance among British Manufacturing Companies," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 18(3), pages 79-89, September. [Downloadable!] (restricted)
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  24. Fryges, Helmut, 2006. "Hidden champions - how young and small technology-oriented firms can attain high export-sales ratios," ZEW Discussion Papers 06-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," ZEW Discussion Papers 08-085, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  2. Carlos A. Flores, . "Estimation of Dose-Response Functions and Optimal Doses with a Continuous Treatment," Working Papers 0707, University of Miami, Department of Economics. [Downloadable!]
  3. Joachim Wagner, 2008. "Exports, Imports, and Productivity at the Firm Level. An International Perspective: Introduction by Guest Editor," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 591-595, December. [Downloadable!] (restricted)
  4. Alfonso Flores-Lagunes & Arturo Gonzalez & Todd C. Neumann, 2007. "Estimating the Effects of Length of Exposure to a Training Program: The Case of Job Corps," IZA Discussion Papers 2846, Institute for the Study of Labor (IZA). [Downloadable!]
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