Export vs. FDI Behavior of Heterogenous Firms in Heterogenous Markets: Evidence from Sovenia

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Export vs. FDI Behavior of Heterogenous Firms in Heterogenous Markets: Evidence from Sovenia

Author Info

Joze P. Damijan
Marko Glaznar
Janez Prasnikar
Saso Polanec

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Abstract

This paper adds a new dimension to the recent literature on relationship beween firm’s heterogeneity in terms of total factor productivity and its dynamic exports vs. FDI decision, namely the heterogeneity of export markets. We show that higher productivity of investing firms relative to just exporters is not inevitably uniform. Exploiting a complete set of Slovenian exporting firms in the period 1994 - 2002, we confirm the tendency of higher productivity firms to engage in FDI only for FDI conducted in high wage countries. In addition, we find no evidence in favor of either market-seeking (horizontal) or factor-seeking (vertical) motive for FDI. While survey results suggest trade-promotion motive to be just as important, we find little evidence in favor of efficiency of this strategy.

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Publisher Info
Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 14704.

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Length: 35 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:lic:licosd:14704

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-07-04 (All new papers)
NEP-IFN-2004-07-04 (International Finance)
NEP-TRA-2004-07-04 (Transition Economics)

References listed on IDEAS
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Other versions:
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Zvi Griliches & Jacques Mairesse, 1991. "R&D and Productivity Growth: Comparing Japanese and U.S. Manufacturing Firms," NBER Working Papers 1778, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
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Other versions:
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Full references

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.)

Jan De Loecker, 2004. "Do Exports Generate Higher Productivity? Evidence from Slovenia," LICOS Discussion Papers 15104, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
Other versions:
- De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September. [Downloadable!] (restricted)

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