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Robust estimates of exporter productivity premia in German business services enterprises

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Author Info

  • Alexander Vogel

    () (Leuphana University Lüneburg, Institute of Economics, Germany)

  • Joachim Wagner

    () (Leuphana University Lüneburg, Institute of Economics, Germany)

Abstract

A large and growing number of micro-econometric studies show that exporting firms are more productive than firms that sell their products on the home market only. This so-called exporter productivity premium qualifies as a stylized fact. Only recently researchers started to look at the role of extreme observations, or outliers, in shaping these findings. These studies use micro-econometric methods that are robust against outliers to show that very small shares of firms with extreme values drive the result. The large exporter productivity premium found for samples of firms including outliers are dramatically smaller in samples without these extreme observations. Evidence on this, however, is limited so far to firms from manufacturing industries. This note adds comparable evidence for firms from the business services industries. We find that the estimated exporter productivity premium is statistically significant and relevant from an economic point of view when a standard fixed effects estimator is used to control for unobserved firm characteristics, but that it drops to zero when a robust estimator is applied.

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Bibliographic Info

Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 207.

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Length: 27 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:lue:wpaper:207

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Related research

Keywords: Exporter productivity premium; services firms; robust estimation; panel data;

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References

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  1. Vincenzo Verardi & Joachim Wagner, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(4), pages 546-557, August.
  2. Wagner, Joachim & Temouri, Yama & Vogel, Alexander, 2011. "Self-Selection into Export Markets by Business Services Firms: Evidence from France, Germany and the United Kingdom," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48700, Verein für Socialpolitik / German Economic Association.
  3. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  4. Joachim Wagner, 2010. "From estimation results to stylized facts. Twelve recommendations for empirical research in international activities of heterogeneous firms," Working Paper Series in Economics 186, University of Lüneburg, Institute of Economics.
  5. Stephen J. Redding, 2011. "Theories of Heterogeneous Firms and Trade," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 77-105, 09.
  6. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-65, June.
  7. Nicholas Bloom & John Van Reenen, 2010. "Why Do Management Practices Differ across Firms and Countries?," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 203-24, Winter.
  8. 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.
  9. Verardi, Vincenzo & Wagner, Joachim, 2010. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations," IZA Discussion Papers 4964, Institute for the Study of Labor (IZA).
  10. 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.
  11. Verardi, Vincenzo & Croux, Christophe, 2008. "Robust regression in Stata," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/202142, Katholieke Universiteit Leuven.
  12. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  13. Daniel S. Hamermesh, 2000. "The Craft of labormetrics," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
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Cited by:
  1. Damijan, Joze & Konings, Joep & Polanec, Saso, 2012. "Import churning and export performance of multi-product firms," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/349304, Katholieke Universiteit Leuven.
  2. Joachim Wagner, 2012. "New Methods for the Analysis of Links between International Firm Activities and Firm Performance: A Practitioner’s Guide," Working Paper Series in Economics 227, University of Lüneburg, Institute of Economics.
  3. Wagner, Joachim, 2011. "Exports, Foreign Direct Investments and Productivity: Are Services Firms Different?," IZA Discussion Papers 6009, Institute for the Study of Labor (IZA).
  4. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(2), pages 235-267, June.
  5. Henk Kox, 2012. "Export decisions of services firms between agglomeration effects and market-entry costs," CPB Discussion Paper 211, CPB Netherlands Bureau for Economic Policy Analysis.

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