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Are Non-Exporters Locked out of Foreign Markets because of Low Productivity?: Evidence from New Zealand Agriculture and Forestry

  • Kris Iyer

    ()

    (Ministry of Economic Development, Government of New Zealand)

  • Philip Andrew Stevens

    ()

    (Ministry of Economic Development, Government of New Zealand)

  • Darran Austin

    ()

    (Ministry of Agriculture and Forestry, Government of New Zealand)

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.

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File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I2-P155.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 30 (2010)
Issue (Month): 2 ()
Pages: 1694-1709

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Handle: RePEc:ebl:ecbull:eb-10-00168
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  1. Jan De Loecker, 2004. "Do Exports Generate Higher Productivity? Evidence from Slovenia," LICOS Discussion Papers 15104, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
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