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Productivity and International Trade: Firm Level Evidence from a Small Open Economy

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Listed author(s):
  • Martin Andersson

    ()

  • Hans Lööf
  • Sara Johansson

Abstract

This paper presents a comprehensive description and analysis of the international trading activities of firms based on novel detailed Swedish data. As a small open economy with a limited domestic market, Sweden constitutes an interesting contrast to existing evidence. We show that much of the stylized facts from large countries (specifically the US) about firms’ participation in international trade also pertain to a small open economy. We provide robust evidence of selection operating from market to market which is consistent with that low productive firms are confined to markets with low productivity thresholds. We further show that selection also applies to number of products traded. Both export and import productivity premiums increase in number of markets and number of products traded, respectively. There is a substantial heterogeneity among exporters and importers in terms of the number of markets they trade with and in terms of the number of products they trade.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10290-008-0169-5
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Article provided by Springer & Institut für Weltwirtschaft (Kiel Institute for the World Economy) in its journal Review of World Economics.

Volume (Year): 144 (2008)
Issue (Month): 4 (December)
Pages: 774-801

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Handle: RePEc:spr:weltar:v:144:y:2008:i:4:p:774-801
DOI: 10.1007/s10290-008-0169-5
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Keywords: International trade; exports; imports; firm heterogeneity; productivity; import premium; export premium;

Other versions of this item:

Find related papers by JEL classification:
  • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
  • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • F14 - International Economics - - Trade - - - Empirical Studies of Trade
  • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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  1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
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  19. Ram C. Acharya & Wolfgang Keller, 2009. "Technology transfer through imports," Canadian Journal of Economics, Canadian Economics Association, vol. 42(4), pages 1411-1448, November.
  20. Andersson, Martin, 2007. "Entry costs and adjustments on the extensive margin - an analysis of how familiarity breeds exports," Working Paper Series in Economics and Institutions of Innovation 81, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  21. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(4), pages 605-628, December.
  22. Davide Castellani & Antonello Zanfei, 2003. "Technology gaps, absorptive capacity and the impact of inward investments on productivity of European firms ," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 555-576.
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