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

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  • Hagemejer, Jan

Abstract

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.

Suggested Citation

  • Hagemejer, Jan, 2007. "Factors driving the firms decision to export. Firm-level evidence from Poland," MPRA Paper 17717, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17717
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    References listed on IDEAS

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    1. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2003. "Falling Trade Costs, Heterogeneous Firms, and Industry Dynamics," Working Paper Series WP03-4, Peterson Institute for International Economics.
    2. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 245-276.
    3. 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, President and Fellows of Harvard College, vol. 113(3), pages 903-947.
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    6. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
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    Cited by:

    1. Moisă ALTĂR & Ana-Maria CAZACU, 2016. "Testing Self-Selection And Learning By Exporting Hypotheses. The Case Of Romania," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(1), pages 5-22.
    2. Piotr Gabrielczak & Tomasz Serwach, 2014. "The Link between Firm-Level Productivity and Decisions to Export," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 10(01), pages 3-8.

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    More about this item

    Keywords

    productivity; exports; firm-level data;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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