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Factors driving the firms decision to export. Firm-level evidence from Poland

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  • Hagemejer, Jan

Abstract

The model by Melitz (2003) predicts that if firms differ in their productivity (TFP) and there exists a fixed costs of entry to export markets, firms begin exporting if productivity exceeds a certain threshold value. Productivity is thus a crucial factor behind firms' export market participation. To verify this, I estimate a simple probit model of the firms decision to export, based on the Polish manufacturing firm-level data. Estimation of productivity of individual firms is troublesome as the standard OLS method produces biased estimates due to the endogeneity of factor choice. I use a multi-stage semi-parametric approach, as proposed by Olley and Pakes (1996) controlling for endogeneity and the bias caused by firms exiting and entering the sample during the period under consideration. Besides determining the significance of the TFP coefficient in the probit regression, I examine the paths of productivity of firms entering the export market and make an attempt to identify the potential learning-by-exporting effects.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17717.

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Date of creation: 06 Jun 2007
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Handle: RePEc:pra:mprapa:17717

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Keywords: productivity; exports; firm-level data;

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References

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  1. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and Productivity in International Trade," Boston University - Institute for Economic Development 105, Boston University, Institute for Economic Development.
  2. 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.
  3. James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
  4. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  5. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
  6. Manuela Angelucci & Saul Estrin & Jozef Konings & Zbigniew Zolkiewski, 2002. "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries: Micro Evidence from Bulgaria, Romania and Poland," William Davidson Institute Working Papers Series 434, William Davidson Institute at the University of Michigan.
  7. Andrew B. Bernard & J. Bradford Jensen, 2000. "Exporting and Productivity," Working Papers 00-07, Center for Economic Studies, U.S. Census Bureau.
  8. Roberts, Mark J & Tybout, James R, 1997. "Producer Turnover and Productivity Growth in Developing Countries," World Bank Research Observer, World Bank Group, vol. 12(1), pages 1-18, February.
  9. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  10. Arnold, Jens Matthias & Hussinger, Katrin, 2004. "Export Behavior and Firm Productivity in German Manufacturing: A Firm-level Analysis," ZEW Discussion Papers 04-12, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. 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.
  12. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
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