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Factors driving the firms decision to export. Firm-level evidence from Poland

  • Hagemejer, Jan

The model by Melitz (2003) predicts that if firms differ in their productivity (TFP) and there exists a fixed costs of entry to export markets, firms begin exporting if productivity exceeds a certain threshold value. Productivity is thus a crucial factor behind firms' export market participation. To verify this, I estimate a simple probit model of the firms decision to export, based on the Polish manufacturing firm-level data. Estimation of productivity of individual firms is troublesome as the standard OLS method produces biased estimates due to the endogeneity of factor choice. I use a multi-stage semi-parametric approach, as proposed by Olley and Pakes (1996) controlling for endogeneity and the bias caused by firms exiting and entering the sample during the period under consideration. Besides determining the significance of the TFP coefficient in the probit regression, I examine the paths of productivity of firms entering the export market and make an attempt to identify the potential learning-by-exporting effects.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17717.

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Date of creation: 06 Jun 2007
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Handle: RePEc:pra:mprapa:17717
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  1. Andrew B. Bernard & J. Bradford Jensen, 2000. "Exporting and Productivity," Working Papers 00-07, Center for Economic Studies, U.S. Census Bureau.
  2. 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.
  3. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
  4. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 903-947.
  5. Jens Matthias Arnold & Katrin Hussinger, 2003. "Export Behavior and Firm productivity in German Manufacturing. A Firm-Level Analysis," Development Working Papers 184, Centro Studi Luca d'Agliano, University of Milano.
  6. Roberts, Mark J & Tybout, James R, 1997. "Producer Turnover and Productivity Growth in Developing Countries," World Bank Research Observer, World Bank Group, vol. 12(1), pages 1-18, February.
  7. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and Productivity in International Trade," Boston University - Institute for Economic Development 105, Boston University, Institute for Economic Development.
  8. Saul Estrin & Jozef Konings & Zbigniew Zolkiewski & Manuela Angelucci, 2001. "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries. Micro Evidence from Bulgaria, Romania and Poland," LICOS Discussion Papers 10401, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  9. Andrew B. Bernard & J. Bradford Jensen, 2001. "Why Some Firms Export," NBER Working Papers 8349, National Bureau of Economic Research, Inc.
  10. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
  11. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  12. Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
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