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Firm heterogeneity and development: Evidence from Latin American countries

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  • Han-Hsin Chang
  • Charles Van Marrewijk

Abstract

We analyze normalized productivity differences for 15 developing Latin American countries and four firm types: National Domestic, National Exporter, Foreign Domestic, and Foreign Exporter. There are no productivity thresholds for viability, export activity, or multinational activity, but we do find a clear size productivity premium and development productivity premium in the manufacturing sectors. We also find a clear foreign-ownership productivity premium, both for domestic firms and for exporting firms and both for manufacturing sectors and services sectors. In contrast, we only find an export productivity premium for national firms in the manufacturing sectors.

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  • Han-Hsin Chang & Charles Van Marrewijk, 2013. "Firm heterogeneity and development: Evidence from Latin American countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 11-52, February.
  • Handle: RePEc:taf:jitecd:v:22:y:2013:i:1:p:11-52
    DOI: 10.1080/09638199.2012.704063
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    1. Demena, B.A. & Msami, J. & Mmari, D.E. & van Bergeijk, P.A.G., 2021. "Productivity premia and firm heterogeneity in Eastern Africa," ISS Working Papers - General Series 680, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Naudé, Wim & Gries, Thomas & Bilkic, Natasa, 2015. "Playing the lottery or dressing up? A model of firm-level heterogeneity and the decision to export," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 1-17.
    3. Yoshimichi Murakami, 2021. "Trade liberalization and wage inequality: Evidence from Chile," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(3), pages 407-438, April.
    4. Schmerer, Hans-Jörg & Capuano, Stella & Egger, Hartmut & Koch, Michael, 2015. "Offshoring and Firm Overlap," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113147, Verein für Socialpolitik / German Economic Association.
    5. Peter A.G. van Bergeijk & Charles van Marrewijk, 2013. "Heterogeneity and development: An agenda," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 1-10, February.
    6. Naudé, Wim & Matthee, Marianne, 2012. "Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?," Working Papers 38, JICA Research Institute.
    7. Tamminen, Saara & van den Berg, Marcel & van Marrewijk, Charles, 2016. "Trade, Productivity and Profits: On Profit levels and Profit margins," Working Papers 80, VATT Institute for Economic Research.
    8. Naudé, Wim & Gries, Thomas & Bilkic, Natasa, 2013. "Firm-Level Heterogeneity and the Decision to Export: A Real Option Approach," IZA Discussion Papers 7346, Institute of Labor Economics (IZA).

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