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Exports and Productivity Growth - First Evidence from a Continuous Treatment Approach

Author

Listed:
  • Helmut Fryges

    (Centre for European Economic Research (ZEW))

  • Joachim Wagner

    (University of Lueneburg and Max Planck Institute of Economics Campus 4.210, 21332 Lueneburg, Germany,)

Abstract

A recent survey of 54 micro-econometric studies reveals that exporting firms are more productive than non-exporters. On the other hand, previous empirical studies show that exporting does not necessarily improve productivity. One possible reason for this result is that most previous studies are restricted to analysing the relationship between a firm's export status and the growth of its labour productivity, using the firms' export status as a binary treatment variable and comparing the performance of exporting and non-exporting firms. In this paper, we apply the newly developed generalised propensity score (GPS) methodology that allows for continuous treatment, that is, different levels of the firms' export activities. Using the GPS method and a large panel data set for German manufacturing firms, we estimate the relationship between a firm's export-sales ratio and its labour productivity growth rate. We find that there is a causal effect of firms' export activities on labour productivity growth. However, exporting improves labour productivity growth only within a sub-interval of the range of firms' export-sales ratios.

Suggested Citation

  • Helmut Fryges & Joachim Wagner, 2007. "Exports and Productivity Growth - First Evidence from a Continuous Treatment Approach," Jena Economics Research Papers 2007-063, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-063
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    References listed on IDEAS

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    More about this item

    Keywords

    Export-sales ratio; labour productivity; continuous treatment; dose-response function;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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