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Robust estimates of exporter productivity premia in German business services enterprises

Listed author(s):
  • 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
Handle: RePEc:lue:wpaper:207
Contact details of provider: Web page: http://leuphana.de/institute/ivwl.html

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  1. Vincenzo Verardi & Joachim Wagner, 2010. "Productivity premia for German manufacturing firms exporting to the Euro-area and beyond: First evidence from robust fixed effects estimations," Working Paper Series in Economics 172, University of Lüneburg, Institute of Economics.
  2. Joachim Wagner, 2010. "From estimation results to stylized facts. Twelve recommendations for empirical research in international activities of heterogeneous firms," Working Paper Series in Economics 186, University of Lüneburg, Institute of Economics.
  3. Yama Temouri & Alexander Vogel & Joachim Wagner, 2010. "Self-selection into export markets by business services firms – Evidence from France, Germany and the United Kingdom," Working Paper Series in Economics 183, University of Lüneburg, Institute of Economics.
  4. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," NBER Working Papers 11555, National Bureau of Economic Research, Inc.
  5. Stephen Redding, 2010. "Theories of heterogeneous firms and trade," LSE Research Online Documents on Economics 48908, London School of Economics and Political Science, LSE Library.
  6. 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.
  7. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  8. Vincenzo Verardi & Christophe Croux, 2009. "Robust regression in Stata," Stata Journal, StataCorp LP, vol. 9(3), pages 439-453, September.
  9. 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.
  10. 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).
  11. Chad Syverson, 2010. "What Determines Productivity?," NBER Working Papers 15712, National Bureau of Economic Research, Inc.
  12. Daniel S. Hamermesh, 2000. "The Craft of Labormetrics," ILR Review, Cornell University, ILR School, vol. 53(3), pages 363-380, April.
  13. repec:spr:weltar:v:144:y:2008:i:4:p:596-635 is not listed on IDEAS
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