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Market Expansion and Productivity Growth: Do New Domestic Markets Matter As Much As New International Markets?

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  • Baldwin, John R. Yan, Beiling

Abstract

This paper asks how market expansion contributes to productivity growth. It investigates whether entry to both new international markets and new domestic markets is associated with greater productivity growth. It also examines whether exit from export markets is necessarily associated with deteriorating performance or whether it too can lead to success when associated with movements to new markets. Finally, the paper examines the strategy of firms that move to new markets after they withdraw from export markets in order to examine the differences that set them apart from their counterparts that do not find themselves able to adapt because they simply withdraw to their home domestic markets.

Suggested Citation

  • Baldwin, John R. Yan, Beiling, 2012. "Market Expansion and Productivity Growth: Do New Domestic Markets Matter As Much As New International Markets?," Economic Analysis (EA) Research Paper Series 2012078e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp5e:2012078e
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    References listed on IDEAS

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    1. Joachim Wagner, 2016. "Exports and Productivity: A Survey of the Evidence from Firm Level Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 1, pages 3-41, World Scientific Publishing Co. Pte. Ltd..
    2. John Baldwin & Wulong Gu, 2003. "Export-market participation and productivity performance in Canadian manufacturing," Canadian Journal of Economics, Canadian Economics Association, vol. 36(3), pages 634-657, August.
    3. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    4. Verdoorn, P J, 1980. "Verdoorn's Law in Retrospect: A Comment," Economic Journal, Royal Economic Society, vol. 90(358), pages 382-385, June.
    5. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    6. John R. Baldwin & David Sabourin, 2002. "Advanced technology use and firm performance in Canadian manufacturing in the 1990s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 761-789, August.
    7. Henry Kaiser, 1958. "The varimax criterion for analytic rotation in factor analysis," Psychometrika, Springer;The Psychometric Society, vol. 23(3), pages 187-200, September.
    8. John R. Baldwin & Wulong Gu, 2004. "Trade Liberalization: Export-market Participation, Productivity Growth, and Innovation," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 372-392, Autumn.
    9. John R. Baldwin & Guy Gellatly, 2003. "Innovation Strategies and Performance in Small Firms," Books, Edward Elgar Publishing, number 3062.
    10. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
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    Cited by:

    1. Maksym Sitnicki, 2018. "Franchising Model Of Commercialization Of Scientific Libraries' Services At Research Universities," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(2).
    2. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.
    3. Maria Luisa Mancusi & Andrea Vezzulli & Serena Frazzoni & Zeno Rotondi & Maurizio Sobrero, 2018. "Export and Innovation in Small and Medium Enterprises: The Role of Concentrated Bank Borrowing," Economica, London School of Economics and Political Science, vol. 85(337), pages 177-204, January.
    4. Christoph March & Ina Schieferdecker, 2021. "Technological Sovereignty as Ability, Not Autarky," CESifo Working Paper Series 9139, CESifo.
    5. Jianmin Tang, 2014. "Are small or large producers driving the Canada‐U.S. labour productivity gap? Recent evidence from manufacturing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(2), pages 517-539, May.
    6. Daniel Schwanen, 2014. "Registering in Harmony: The Case for Pan-Canadian Corporate Registration," e-briefs 171, C.D. Howe Institute.
    7. Piedrahita, N. & Hailu, G., 2018. "Exports and Productivity in Canadian Food Manufacturing," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277322, International Association of Agricultural Economists.

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