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Importing, exporting and productivity in Irish manufacturing

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  • Fergal McCann

Abstract

The impact of international trade on firm productivity is tested by accounting for firms' import as well as export status for a large panel of Irish manufacturing firms. Two-way traders and exporters-only are found to be the most productive firms, with a significant gap between them and importersonly and non-traders. tfp is calculated using a modified version of the Olley and Pakes (1996) estimator, taking account of a four-category trade status. Selection of the most productive firms into exporting or importing is not found in any robust sense. Fixed effcts, as well as Propensity Score Matching with Difference in Differences, are used to calculate productivity improvements from entering into international trade. These improvements are found to be highly contingent on export status, with import status being unimportant. The key finding of the paper is that the gains from trade, for Ireland at least, appear to lie on the export side. Interestingly, quitting trade leads to a mirror image effect to that of entry for all trade statuses.

Suggested Citation

  • Fergal McCann, 2009. "Importing, exporting and productivity in Irish manufacturing," Working Papers 200922, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:200922
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    File URL: http://hdl.handle.net/10197/2620
    File Function: First version, 2009
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Svetlana Batrakova & Ronald Davies, 2012. "Is there an environmental benefit to being an exporter? Evidence from firm-level data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 449-474.
    2. Lastauskas, Povilas, 2013. "Europe's revolving doors: Import competition and endogenous firm entry institutions," Kiel Advanced Studies Working Papers 464, Kiel Institute for the World Economy (IfW).
    3. Dalgic, Basak & Fazlioglu, Burcu & Gasiorek, Michael, 2015. "Costs of trade and self-selection into exporting and importing: The case of Turkish manufacturing firms," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-28.
    4. Svetlana Batrakova, 2012. "Does industry concentration matter for pollution haven effects?," GRI Working Papers 90, Grantham Research Institute on Climate Change and the Environment.
    5. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
    6. Armando Silva & Óscar Afonso & Ana Paula Africano, 2010. "Economic performance and international trade engagement: the case of Portuguese manufacturing firms," FEP Working Papers 369, Universidade do Porto, Faculdade de Economia do Porto.
    7. Armando Silva & Oscar Afonso & Ana Africano, 2013. "Economic performance and international trade engagement: the case of Portuguese manufacturing firms," International Economics and Economic Policy, Springer, pages 521-547.
    8. Smeets, Valerie & Warzynski, Frederic, 2013. "Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade," Journal of International Economics, Elsevier, pages 237-244.
    9. Joern Kleinert & Nico Zorell, 2012. "The export-magnification effect of offshoring," Graz Economics Papers 2012-09, University of Graz, Department of Economics.
    10. Óscar Afonso & Sara Monteiro & Maria João Ribeiro Thompson, 2010. "A Growth Model for the Quadruple Helix Innovation Theory," NIPE Working Papers 12/2010, NIPE - Universidade do Minho.
    11. David Sondermann, 2014. "Productivity in the euro area: any evidence of convergence?," Empirical Economics, Springer, pages 999-1027.
    12. Smeets, Valérie & Warzynski, Frédéric, 2010. "Learning by Exporting, Importing or Both? Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade," Working Papers 10-13, University of Aarhus, Aarhus School of Business, Department of Economics.
    13. Piotr Gabrielczak & Agnieszka Klysik-Uryszek, 2014. "Import zaopatrzeniowy i inwestycyjny a perspektywy uczenia sie przedsiebiorstw przemyslowych z wojewodztwa lodzkiego / Import of intermediate and capital goods and learning perspectives for manufactur," International Economics, University of Lodz, Faculty of Economics and Sociology, pages 45-59.

    More about this item

    Keywords

    Trade orientation; heterogeneous firms; Productivity; International trade; Manufacturing industries--Ireland; Industrial productivity; Ireland--Commerce;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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