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Exporting and Economic Performance: Firm-level Evidence of Spanish Manufacturing

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  • José C. Fariñas
  • Ana Martín-Marcos

Abstract

In a previous paper, Delgado, Fariñas and Ruano (2002) report TFP differences between exporters and non-exporters on the basis of a sample of Spanish manufacturing firms. In this paper, we extend the previous analysis in three directions using a similar data set. First, we investigate additional economic performance differences between exporters and non-exporters. Second, we measure TFP differences estimating production functions that control for unobserved heterogeneity and simultaneity bias. Third, we explore the self-selection and learning-by-exporting hypothesis as explanations for the greater performance of exporters. With respect to the results, we confirm that many indicators of economic performance such as productivity, size, wages and innovation are greater in exporting firms. Furthermore, TFP differences between exporters and non-exporters estimated with parametric methods are remarkably similar to those estimated using index numbers. Finally, performance differences and transition patterns between the export market and the domestic market indicate higher performance for entering exporters with respect to non-exporters at the moment of entry. We find evidence of selection in the entry and the exit side of the export market. One of the basic results that we obtain indicates that after controlling for self-selection, the productivity growth of entering exporters does not significantly change with respect to non-exporters. As the evidence we find indicates no systematic changes in performance between non-exporters and exporters after entry takes place, we do not confirm the learning-by-exporting hypothesis. Copyright 2007 The Authors Journal compilation Blackwell Publishing Ltd. 2007 .

Suggested Citation

  • José C. Fariñas & Ana Martín-Marcos, 2007. "Exporting and Economic Performance: Firm-level Evidence of Spanish Manufacturing," The World Economy, Wiley Blackwell, vol. 30(4), pages 618-646, April.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:4:p:618-646
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    1. repec:spr:portec:v:1:y:2002:i:2:d:10.1007_s10258-002-0009-9 is not listed on IDEAS
    2. Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc.
    3. Stephen Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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