Export Behavior and Firm Productivity in German Manufacturing: A Firm-Level Analysis

This paper examines the causal relationship between productivity and exporting in German manufacturing. We find a causal link from high productivity to presence in foreign markets, as postulated by a recent literature on international trade with heterogeneous firms. We apply a matching technique in...

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Bibliographic Details
Published in:Review of world economics 2005-07, Vol.141 (2), p.219-243
Main Authors: Arnold, Jens Matthias, Hussinger, Katrin
Format: Article
Language:English
Subjects:
Age distribution
Bias
Business strategies
Causality
Data analysis
Economic theory
Empirical evidence
Empirical tests
Exporters
Exports
Foreign markets
Germany
Global economy
Industrial production
Industrial productivity
International market
International trade
Manufacturing
Market analysis
Production estimates
Productivity
Sunk costs
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Summary:This paper examines the causal relationship between productivity and exporting in German manufacturing. We find a causal link from high productivity to presence in foreign markets, as postulated by a recent literature on international trade with heterogeneous firms. We apply a matching technique in order to analyze whether the presence in international markets enables firms to achieve further productivity improvements, without finding significant evidence for this. We conclude that high-productivity firms self-select themselves into export markets, while exporting itself does not play a significant role for the productivity of German firms.
ISSN:1610-2878
1610-2886
DOI:10.1007/s10290-005-0026-8