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Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms

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  • Marco Grazzi

Abstract

Using firm level data this study investigates the relation between export activity and firm's profitability. The paper shows that, contrary to other performance indicators such as productivity, exporting activity is not systematically associated to higher firm's profitability. This is shown both by means of non-parametric methods and, with an approach that is more standard within the empirical trade literature, by regression techniques that try to identify an "export premium".

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2009/16.

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Date of creation: 27 Oct 2009
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Handle: RePEc:ssa:lemwps:2009/16

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Keywords: export premium; productivity; profitability;

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References

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  1. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
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  5. Andrew.B Bernard & J. Bradford Jensen & Stephen Redding & Peter K. Schott, 2007. "Firms in international trade," LSE Research Online Documents on Economics 3682, London School of Economics and Political Science, LSE Library.
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  8. Matteo Bugamelli & Luigi Infante, 2003. "Sunk Costs of Exports," Temi di discussione (Economic working papers) 469, Bank of Italy, Economic Research and International Relations Area.
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  10. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d\'Agliano, University of Milano.
  11. 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.
  12. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76 National Bureau of Economic Research, Inc.
  13. Gu, Wulong & Baldwin, John R., 2003. "Plant Turnover and Productivity Growth in Canadian Manufacturing," Analytical Studies Branch Research Paper Series 2003193e, Statistics Canada, Analytical Studies Branch.
  14. Giulio Bottazzi & Marco Grazzi, 2010. "Wage--size relation and the structure of work-force composition in Italian manufacturing firms," Cambridge Journal of Economics, Oxford University Press, vol. 34(4), pages 649-669.
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  17. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 16(1), pages 1-22, May.
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  24. De Locker, Jan & Warzynski, Frederic, 2009. "Markups and Firm-Level Export Status," Working Papers 09-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  25. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2008. "Productivity, profitability and financial performance," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 711-751, August.
  26. Giulio Bottazzi & Angelo Secchi, 2005. "Explaining the Distribution of Firms Growth Rates," LEM Papers Series 2005/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  27. Robert H Mcguckin & Bradford J Jensen, 1996. "Firm Performance And Evolution Empirical Regularities In The U.S. Microdata," Working Papers 96-10, Center for Economic Studies, U.S. Census Bureau.
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  29. Giovanni Dosi & Marco Grazzi, 2006. "Technologies as problem-solving procedures and technologies as input--output relations: some perspectives on the theory of production," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 173-202, February.
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  31. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
  32. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
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Citations

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Cited by:
  1. Sánchez, Patricio & Gallego, Elena & Rivero, Dolores & Lago-Peñas, Santiago, 2014. "El impacto de la internacionalización sobre las empresas: Evidencia empírica para el caso español
    [The impact of internationalization on firms: Empirical evidence for the Spanish case]
    ," MPRA Paper 54602, University Library of Munich, Germany.
  2. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2010. "Turbulence underneath the big calm? Exploring the micro-evidence behind the flat trend of manufacturing productivity in Italy," LEM Papers Series 2010/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  3. Ijaz Hussain, 2012. "The Consequences of Easy Credit Policy, High Gearing, and Firms’ Profitability in Pakistan’s Textile Sector: A Panel Data Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 33-44, Jan-June.
  4. repec:hal:cesptp:hal-00642680 is not listed on IDEAS
  5. Wagner, Joachim, 2011. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," IZA Discussion Papers 5766, Institute for the Study of Labor (IZA).

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