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The U-Shaped Productivity Dynamics of French Exporters

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  • Flora Bellone
  • Patrick Musso
  • Lionel Nesta
  • Michel Quere

Abstract

Sunk costs due to entry into foreign markets are used as the main justification of the relationship between firm productivity and exports. We use a large-scale dataset on French manufacturing firms to evaluate how sunk costs affect the productivity of new exporters. We find that the typical productivity dynamics of a new exporter is U-shaped. Prior to entry into export markets, firm productivity temporarily decreases. It recovers contemporaneously with entry, as the benefits from sales to foreign markets are harvested. This pattern is more pronounced for intensively exporting firms and for firms operating in capital intensive or high technology sectors.
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Suggested Citation

  • Flora Bellone & Patrick Musso & Lionel Nesta & Michel Quere, 2008. "The U-Shaped Productivity Dynamics of French Exporters," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 636-659, December.
  • Handle: RePEc:spr:weltar:v:144:y:2008:i:4:p:636-659
    DOI: 10.1007/s10290-008-0164-x
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    Cited by:

    1. Flora Bellone & Patrick Musso & Lionel Nesta & Stefano Schiavo, 2008. "Financial Constraints as a Barrier to Export Participation," Sciences Po publications info:hdl:2441/9797, Sciences Po.
    2. Kozo Kiyota & Toshiyuki Matsuura & Lionel Nesta, 2019. "What'S Behind The Figures? Quantifying The Cross‐Country Exporter Productivity Gap," Economic Inquiry, Western Economic Association International, vol. 57(3), pages 1256-1271, July.
    3. Flora Bellone & Patrick Musso & Lionel Nesta & Stefano Schiavo, 2010. "Financial Constraints and Firm Export Behaviour," The World Economy, Wiley Blackwell, vol. 33(3), pages 347-373, March.
    4. Bellone, Flora & Kiyota, Kozo & Matsuura, Toshiyuki & Musso, Patrick & Nesta, Lionel, 2014. "International productivity gaps and the export status of firms: Evidence from France and Japan," European Economic Review, Elsevier, vol. 70(C), pages 56-74.
    5. Minetti, Raoul & Zhu, Susan Chun, 2011. "Credit constraints and firm export: Microeconomic evidence from Italy," Journal of International Economics, Elsevier, vol. 83(2), pages 109-125, March.
    6. Fabling, Richard & Sanderson, Lynda, 2013. "Exporting and firm performance: Market entry, investment and expansion," Journal of International Economics, Elsevier, vol. 89(2), pages 422-431.
    7. Joachim Wagner, 2008. "Exports, Imports, and Productivity at the Firm Level. An International Perspective: Introduction by Guest Editor," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 591-595, December.
    8. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    9. Kent Eliasson & Pär Hansson & Markus Lindvert, 2012. "Do firms learn by exporting or learn to export? Evidence from small and medium-sized enterprises," Small Business Economics, Springer, vol. 39(2), pages 453-472, September.
    10. Vincenzo Verardi & Joachim Wagner, 2021. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-area and Beyond: First Evidence from Robust Fixed Effects Estimations," World Scientific Book Chapters, in: Joachim Wagner (ed.), MICROECONOMETRIC STUDIES OF FIRMS’ IMPORTS AND EXPORTS Advanced Methods of Analysis and Evidence from German Enterprises, chapter 7, pages 87-109, World Scientific Publishing Co. Pte. Ltd..
    11. Raoul Minetti & Pierluigi Murro & Susan Chun Zhu, 2015. "Family Firms, Corporate Governance and Export," Economica, London School of Economics and Political Science, vol. 82, pages 1177-1216, December.
    12. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
    13. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.
    14. Matthieu Crozet & Isabelle Méjean & Soledad Zignago, 2011. "Plus grandes, plus fortes, plus loin.... Les performances des firmes exportatrices françaises," Revue économique, Presses de Sciences-Po, vol. 62(4), pages 717-736.
    15. KIYOTA Kozo & MATSUURA Toshiyuki & Lionel NESTA, 2016. "Understanding the Cross-country Productivity Gap of Exporters," Discussion papers 16019, Research Institute of Economy, Trade and Industry (RIETI).
    16. repec:spo:wpecon:info:hdl:2441/9948 is not listed on IDEAS
    17. Gkypali, Areti & Love, James H. & Roper, Stephen, 2021. "Export status and SME productivity: Learning-to-export versus learning-by-exporting," Journal of Business Research, Elsevier, vol. 128(C), pages 486-498.
    18. Vu, Van Huong, 2012. "Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs," MPRA Paper 40708, University Library of Munich, Germany.
    19. Serrano, Javier & Myro, Rafael, 2019. "From domestic to exporter, what happens? Evidence for Spanish manufacturing firms," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 380-392.

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