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Are Exporters More Productive than Non-Exporters?

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Abstract

In an effort to explain the observed heterogeneity in the exporting decisions of rms, the empirical trade literature has concluded that exporting rms are more productive than non-exporting rms. In this paper, I show that the foundation for this conclusion is weak, given that the productivity estimates used in the literature suffer from several sources of potential bias. I apply a new method for estimating production functions to control for these sources of bias. Using data on manufacturing rms in Colombia, I find that, while the measures of productivity used in the literature imply that exporters are more productive, once I correct for the bias, there is no correlation between productivity and export status. This result is inconsistent with productivity being the main determinant of entry into export markets, and suggests the importance of other sources of heterogeneity in explaining rm-level exporting decisions.

Suggested Citation

  • David A. Rivers, 2013. "Are Exporters More Productive than Non-Exporters?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20132, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  • Handle: RePEc:uwo:hcuwoc:20132
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    File URL: http://economics.uwo.ca/chcp/workingpapers_docs/wp2013/Rivers02.pdf
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    1. Van Biesebroeck, Johannes, 2005. "Exporting raises productivity in sub-Saharan African manufacturing firms," Journal of International Economics, Elsevier, vol. 67(2), pages 373-391, December.
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    Cited by:

    1. Alessandro Borin & Michele Mancini, 2016. "Foreign direct investment and firm performance: an empirical analysis of Italian firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 705-732, November.
    2. Camila Casas & Federico J. Díez & Alejandra González, 2015. "Productivity and Export Market Participation: Evidence from Colombia," BORRADORES DE ECONOMIA 012678, BANCO DE LA REPÚBLICA.
    3. Hu, Zhongzhong & Rodrigue, Joel & Tan, Yong & Yu, Chunhai, 2017. "Product Churning, Reallocation, and Chinese Export Growth," MPRA Paper 81813, University Library of Munich, Germany.
    4. Casas, Camila & Diez, Federico J. & Gonzalez, Alejandra, 2017. "Heterogeneous exporters: quantitative differences and qualitative similarities," Working Papers 16-26, Federal Reserve Bank of Boston.
    5. Hu, Zhongzhong & Rodrigue, Joel & Tan, Yong & Yu, Chunhai, 2017. "Product churning, reallocation, and Chinese export growth," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 147-164.

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