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International Trade and Productivity: Does Destination Matter?

Author

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  • Yevgeniya Shevtsova

Abstract

The paper empirically assesses microeconomic exporting-productivity nexus using the data for Ukrainian manufacturing and service sectors for the years 2000-2005. The results of the estimation show that firms with higher total factor productivity (TFP) levels in the period prior to entry are much more likely to enter export markets. Also age, size and intangible assets of the firm have significant positive influence on the probability of exporting. The results also suggest significant positive post-entry productivity effect for the firms that enter export markets and negative productivity effect for those that exit. At the industry level the results also confirm the presence of learning-by-exporting effect. However the effect is not universal and varies between different types of exporting firms and export destinations. Firms that export to the countries of the European Union and other OECD countries experience higher advances in their TFP than firms exporting to other CIS countries. The magnitude of the effect is also positively correlated with the capital intensity of the industries. These findings have important implications for the formation of industrial policies, suggesting that government programs designed to upgrade firms’ productivity and innovative capabilities would increase the ability of domestic firms to overcome foreign market barriers as well as assimilate further benefits arising from exporting, which can further enhance international competitiveness of Ukrainian firms.

Suggested Citation

  • Yevgeniya Shevtsova, 2012. "International Trade and Productivity: Does Destination Matter?," Discussion Papers 12/18, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:12/18
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    References listed on IDEAS

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    Cited by:

    1. Popov, V., 2014. "Industrial Policy - How to Choose Industries that Should Be Supported," Journal of the New Economic Association, New Economic Association, vol. 22(2), pages 186-190.
    2. Popov, Vladimir & Chowdhury, Anis, 2015. "What Uzbekistan tells us about industrial policy that we did not know?," MPRA Paper 67013, University Library of Munich, Germany.
    3. Cebeci, Tolga, 2014. "Impact of export destinations on firm performance," Policy Research Working Paper Series 6743, The World Bank.
    4. Shevtsova, Yevgeniya, 2015. "International Trade and Productivity: The Role of Industry and Export Destination," MPRA Paper 69793, University Library of Munich, Germany.

    More about this item

    Keywords

    exports; TFP; matching; Heckman procedure; system GMM; sample selection; endogeneity.;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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