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Are Exporters More Productive than Non-Exporters?

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.

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File URL: http://economics.uwo.ca/cibc/workingpapers_docs/wp2013/Rivers02.pdf
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Paper provided by University of Western Ontario, CIBC Centre for Human Capital and Productivity in its series University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers with number 20132.

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Date of creation: 2013
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Handle: RePEc:uwo:hcuwoc:20132
Contact details of provider: Postal: CIBC Centre for Human Capital and Productivity, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/cibc_workingpapers.html

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