Self Selection and Post-Entry effects of Exports. Evidence from Italian Manufacturing firms

A large body of empirical research suggests the superior performance of exporting firms relative to non exporters. Specifically, firms involved in foreign markets are found to be larger, more productive, more capital and skilled-intensive. This paper provides empirical evidence of the relationship between firm's performances and export behavior in Italian manufacturing firms. Similarly to other empirical studies, we find that exporters are more productive relative to non exporters. Our empirical analysis support the idea that the superior performance of the former is due to a market selection mechanism according to which only the most productive firms are capable of entering international markets. Moreover, we provide empirical evidence on the causal effects of exporting on productivity (and other interesting firm characteristics) by using an econometric approach that combines propensity score matching and Differences in Differences techniques.