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Economic performance and international trade engagement: the case of Portuguese manufacturing firms

  • Armando Silva

    (Instituto Politécnico do Porto - ESEIG)

  • Oscar Afonso

    (Faculdade de Economia, Universidade do Porto, CEFUP and OBEGEF)

  • Ana Paula Africano

    (Faculdade de Economia, Universidade do Porto and CEFUP)

By combining economic and financial data for Portuguese manufacturing firms with data on their exports and imports, we uncover some aspects of the relationship between international trade engagement and firms’ performance. In line with recent theoretical and empirical developments in the international trade literature: (i) we testify that Portuguese international trade is highly concentrated, especially on the import side, and both in inter- and intra-sector terms; (ii) we corroborate previous studies and theses according to which two-way traders outperform only importers, only exporters and above all domestic firms; (iii) we find that the greater the diversification of markets and goods (especially with regard to imports), the better the performance achieved by internationalised firms; (iv) we notice that the higher the intensity of international trade of firms (especially imports), the better the performance of firms; (v) we also present evidence that destination markets, for exports, and, origin markets, for imports, are also important in explaining firm performance.

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Paper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0037.

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Length: 32 pages
Date of creation: May 2011
Date of revision: May 2011
Handle: RePEc:mde:wpaper:0037
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  1. Kyle Handley & Nuno Limão, 2015. "Trade and Investment under Policy Uncertainty: Theory and Firm Evidence," American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 189-222, November.
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  3. 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.
  4. Andersson, Martin & Johansson, Sara & Lööf, Hans, 2007. "Productivity and International Trade - firm-level evidence from a small open economy," Working Paper Series in Economics and Institutions of Innovation 99, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  5. Lawless, Martina, 2009. "Firm export dynamics and the geography of trade," Journal of International Economics, Elsevier, vol. 77(2), pages 245-254, April.
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  10. Bernard, Andrew B. & Jensen, J Bradford & Redding, Stephen J. & Schott, Peter K., 2007. "Firms in International Trade," CEPR Discussion Papers 6277, C.E.P.R. Discussion Papers.
  11. Fergal McCann, 2009. "Importing, exporting and productivity in Irish manufacturing," Working Papers 200922, School of Economics, University College Dublin.
  12. Armando Silva & Oscar Afonso & Ana Paula Africano, 2012. "Which manufacturing firms learn by exporting?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(6), pages 773-805, December.
  13. João Amador & Luca David Opromolla, 2010. "The Margins of Exports: Firms, Products and Destinations," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
  14. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
  15. M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters, in: Regional Climate Change and Variability, chapter 1 Edward Elgar Publishing.
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