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The Theoretical Equivalent of Empirically Measurable Exporter Productivity when Firms are Heterogeneous


  • Philipp J.H. Schröder

    (ASB, Aarhus University, Denmark)

  • Allan Sørensen

    () (School of Economics and Management, Aarhus University, Denmark)


The marginal costs based representation of firm productivity in the Melitz [Melitz, M.J., 2003. The impact of trade on intra-industry reallocations and aggregate industry productiv- ity. Econometrica 71 (6), 1695-1725] model, predicts positive exporter productivity premia. We show that this prediction is reversible when computing the theoretical equivalent of the empirically measurable productivity expression (value added per worker) in the model. The paper discusses implications of this finding for empirical research.

Suggested Citation

  • Philipp J.H. Schröder & Allan Sørensen, 2010. "The Theoretical Equivalent of Empirically Measurable Exporter Productivity when Firms are Heterogeneous," Economics Working Papers 2010-06, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2010-06

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    References listed on IDEAS

    1. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, September.
    2. David Greenaway & Joakim Gullstrand & Richard Kneller, 2005. "Exporting May Not Always Boost Firm Productivity," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(4), pages 561-582, December.
    3. Martina Lawless & Karl Whelan, 2014. "Where Do Firms Export, How Much and Why?," The World Economy, Wiley Blackwell, vol. 37(8), pages 1027-1050, August.
    4. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. Hansson, Pär & Lundin, Nan Nan, 2003. "Exports as an Indicator on or Promoter of Successful Swedish Manufacturing Firms in the 1990s," Working Paper Series 189, Trade Union Institute for Economic Research.
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    More about this item


    Intra-industry trade; firm productivity; heterogeneous firms;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration


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