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Explaining the Size Differences of Exporter Productivity Premia: Theory and Evidence

Listed author(s):
  • Ingo Geishecker
  • Philipp J.H. Schröder
  • Allan Sörensen

Why is it that exporter productivity premia (EPP) differ so widely in size? We take this question to the theory and to the data. We derive the sectoral EPP in a standard heterogeneous firms trade model and apply the insights from the model to 13 years of data for all Danish manufacturing firms. We show that a significant share of the observed variation in EPPs across sectors, and hence across countries, can be explained by the variation in productivity dispersion, trade costs and the elasticity of substitution.

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File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4630.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4630.

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Date of creation: 2014
Handle: RePEc:ces:ceswps:_4630
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  16. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
  17. Jonathan Eaton & Samuel S. Kortum & Sebastian Sotelo, 2012. "International Trade: Linking Micro and Macro," NBER Working Papers 17864, National Bureau of Economic Research, Inc.
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  19. Ricardo A. López, 2009. "Do Firms Increase Productivity in Order to Become Exporters?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(5), pages 621-642, October.
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