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Export Mode, Trade Costs, and Productivity Sorting

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  • Ronald B. Davies

    (University College Dublin; Institute for International Integration Studies, Trinity College Dublin; CES-Ifo)

  • Tine Jeppesen

    (University College Dublin)

Abstract

In this paper we directly test the proposed productivity hierarchy of direct, indirect and non-exporters using firm-level data from 105 developing and transition countries. Using both regression analysis and propensity score matching, we find strong evidence to suggest that direct exporters are on average more productive than both indirect and non-exporters. However, only the results obtained using regression analysis support a similar ranking between indirect and non-exporters. Furthermore, we test the underlying relationship between source-specific fixed trade costs and the average productivity differences between the three firm-types. We find a significant and positive relation between such costs and the average productivity premium of direct exporters only. While other studies have shown that exports by trade intermediaries increase with destination-specific fixed costs, our results suggest that this is also true for source-specific costs, as an increase in the average productivity of direct exporters indicate that a larger share of less productive direct exporters choose to make use of a trade intermediary as export costs rise.

Suggested Citation

  • Ronald B. Davies & Tine Jeppesen, 2012. "Export Mode, Trade Costs, and Productivity Sorting," The Institute for International Integration Studies Discussion Paper Series iiisdp408, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp408
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    References listed on IDEAS

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    3. Fergal McCann, 2013. "Indirect Exporters," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 519-535, December.
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    Cited by:

    1. Gaigné, Carl & Latouche, Karine & Turolla, Stéphane, 2015. "Vertical ownership and export performance: firm-level evidence from France," Working Papers 208913, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    2. Anders Akerman, 2018. "A theory on the role of wholesalers in international trade based on economies of scope," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(1), pages 156-185, February.

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    More about this item

    Keywords

    Heterogeneous firms; Export mode; Exporting Costs;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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