Exports, productivity and capital intensity: Evidence for Brazilian firms

Dieison Casagrande (), Álvaro Hidalgo and Paulo Feistel

Structural Change and Economic Dynamics, 2024, vol. 70, issue C, 279-301

Abstract: Engaging in export activities is a key factor influencing firm performance. This paper explores the export-productivity and export-capital intensity relationship using firm-level data from the Brazilian manufacturing industry over the period 2007–2014. The empirical strategy combines Propensity Score Matching (PSM) and Differences in Differences (DD) methods and explores the fact that firms enter the external market at different moments, generating a variation in the period and permanence in international trade. We find static and dynamic effects on labor productivity, total factor productivity, and capital intensity. Firms that start exports experience an average productivity growth of about 5% and a 2% decrease in capital intensity compared to non-exporting firms. The permanence in the activity magnifies these impacts. After three periods, the growth (reduction) in productivity (capital intensity) is around 10.5% (4.7%). We identify heterogeneous effects, leading to variations in magnitude across dimensions such as technological intensity, size, age, ex-ante levels of productivity and capital intensity, and intensive margin of trade. We also show that firms become more labor intensive by demanding more skilled workers.

Keywords: Productivity; Factor intensity; Start export; Manufacturing industry (search for similar items in EconPapers)
JEL-codes: D22 D24 F10 F14 L25 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:70:y:2024:i:c:p:279-301

DOI: 10.1016/j.strueco.2024.02.012

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