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Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms

  • Marco Grazzi

Using firm level data this study investigates the relation between export activity and firm's profitability. The paper shows that, contrary to other performance indicators such as productivity, exporting activity is not systematically associated to higher firm's profitability. This is shown both by means of non-parametric methods and, with an approach that is more standard within the empirical trade literature, by regression techniques that try to identify an "export premium".

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Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2009/16.

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Date of creation: 27 Oct 2009
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Handle: RePEc:ssa:lemwps:2009/16
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  1. 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.
  2. Giovanni Dosi & Marco Grazzi, 2006. "Technologies as problem-solving procedures and technologies as input--output relations: some perspectives on the theory of production," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 173-202, February.
  3. Gianmarco Ottaviano & Thierry Mayer, . "The happy few: the internationalisation of European firms," Blueprints, Bruegel, number 12.
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  6. Fryges, Helmut & Wagner, Joachim, 2008. "Exports and Profitability: First Evidence for German Manufacturing Firms," ZEW Discussion Papers 08-085, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Sourafel Girma & David Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
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  12. John R. Baldwin & Wulong Gu, 2006. "Plant turnover and productivity growth in Canadian manufacturing," Industrial and Corporate Change, Oxford University Press, vol. 15(3), pages 417-465, June.
  13. G. Bottazzi & E. Cefis & G. Dosi & A. Secchi, 2003. "Invariances and Diversities in the Evolution of Manufacturing Industries," Working Papers 03-17, Utrecht School of Economics.
  14. Wagner, Joachim, 2002. "The causal effects of exports on firm size and labor productivity: first evidence from a matching approach," Economics Letters, Elsevier, vol. 77(2), pages 287-292, October.
  15. De Locker, Jan & Warzynski, Frederic, 2009. "Markups and Firm-Level Export Status," Working Papers 09-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  16. Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 53-82, January.
  17. 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.
  18. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2006. "Productivity, Profitability and Financial Fragility: Evidence from Italian Business Firms," LEM Papers Series 2006/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  19. Basile, Roberto, 2001. "Export behaviour of Italian manufacturing firms over the nineties: the role of innovation," Research Policy, Elsevier, vol. 30(8), pages 1185-1201, October.
  20. Andrew.B Bernard & J. Bradford Jensen & Stephen Redding & Peter K. Schott, 2007. "Firms in international trade," LSE Research Online Documents on Economics 3682, London School of Economics and Political Science, LSE Library.
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  22. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(4), pages 660-694, December.
  23. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  24. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  25. Matteo Bugamelli & Luigi Infante, 2003. "Sunk Costs of Exports," Temi di discussione (Economic working papers) 469, Bank of Italy, Economic Research and International Relations Area.
  26. Bernard, A. & Wagner, J., 1996. "Exports and Success in German Manufacturing," Working papers 96-10, Massachusetts Institute of Technology (MIT), Department of Economics.
  27. 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.
  28. Alessandro Sterlacchini, 2001. "The determinants of export performance: A firm-level study of Italian manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(3), pages 450-472, September.
  29. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
  30. Jensen, J Bradford & McGuckin, Robert H, 1997. "Firm Performance and Evolution: Empirical Regularities in the US Microdata," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 25-47.
  31. Giulio Bottazzi & Angelo Secchi, 2006. "Explaining the distribution of firm growth rates," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 235-256, 06.
  32. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76 National Bureau of Economic Research, Inc.
  33. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
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