Are Non-Exporters Locked out of Foreign Markets because of Low Productivity?: Evidence from New Zealand Agriculture and Forestry
Self-selection of productive firms to exporting suggests that non-exporters are less productive and locked out of international markets due to low productivity. Using a panel dataset of 88,752 New Zealand agriculture and forestry sector firms over the period 2000-07, this paper measures the productivity of exporters and non-exporters separately. The paper finds that exporters are, on average, twice as productive as non-exporters. Across both exporters and non-exporters, we report a mixed rate of productivity growth: negative until the median and positive beyond. Exporters record a higher negative growth rate relative to non-exporters (below the median) and also a higher positive growth rate (beyond the median). Analysis of the productivity distribution in quantiles suggests that the sub-set of non-exporters who have productivity levels similar to that of exporters is large. For this sub-set of firms, it would be erroneous to conclude that the export propensity decision is determined by low productivity.
Volume (Year): 30 (2010)
Issue (Month): 2 ()
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LICOS Discussion Papers
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