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Robust estimates of exporter productivity premia in German business services enterprises

  • Alexander Vogel


    (Leuphana University Lüneburg, Institute of Economics, Germany)

  • Joachim Wagner


    (Leuphana University Lüneburg, Institute of Economics, Germany)

A large and growing number of micro-econometric studies show that exporting firms are more productive than firms that sell their products on the home market only. This so-called exporter productivity premium qualifies as a stylized fact. Only recently researchers started to look at the role of extreme observations, or outliers, in shaping these findings. These studies use micro-econometric methods that are robust against outliers to show that very small shares of firms with extreme values drive the result. The large exporter productivity premium found for samples of firms including outliers are dramatically smaller in samples without these extreme observations. Evidence on this, however, is limited so far to firms from manufacturing industries. This note adds comparable evidence for firms from the business services industries. We find that the estimated exporter productivity premium is statistically significant and relevant from an economic point of view when a standard fixed effects estimator is used to control for unobserved firm characteristics, but that it drops to zero when a robust estimator is applied.

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Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 207.

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Length: 27 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:lue:wpaper:207
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  1. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  2. Vincenzo Verardi & Joachim Wagner, 2012. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations," The World Economy, Wiley Blackwell, vol. 35(6), pages 694-712, 06.
  3. Temouri, Yama & Vogel, Alexander & Wagner, Joachim, 2013. "Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 146-158.
  4. Daniel S. Hamermesh, 2000. "The Craft of labormetrics," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
  5. Eric J. Bartelsman & Mark Doms, 2000. "Understanding productivity: lessons from longitudinal microdata," Finance and Economics Discussion Series 2000-19, Board of Governors of the Federal Reserve System (U.S.).
  6. Stephen Redding, 2010. "Theories of Heterogeneous Firms and Trade," CEP Discussion Papers dp0994, Centre for Economic Performance, LSE.
  7. Verardi, Vincenzo & Wagner, Joachim, 2010. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," IZA Discussion Papers 4928, Institute for the Study of Labor (IZA).
  8. Wagner, Joachim, 2010. "From Estimation Results to Stylized Facts: Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms," IZA Discussion Papers 5175, Institute for the Study of Labor (IZA).
  9. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
  10. The International Study Group on Exports and Productivity & Mauro Pisu, 2008. "Exports and productivity – comparable evidence for 14 countries," Working Paper Research 128, National Bank of Belgium.
  11. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-65, June.
  12. Nick Bloom & John Van Reenen, 2010. "Why do management practices differ across firms and countries?," LSE Research Online Documents on Economics 47491, London School of Economics and Political Science, LSE Library.
  13. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
  14. Daniel S. Hamermesh, 2000. "The Craft of Labormetrics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
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