Trade Complexity and Productivity

Carlo Altomonte () and Gábor Békés

No 914, IEHAS Discussion Papers from Institute of Economics, Hungarian Academy of Sciences

Abstract: We exploit a panel dataset of Hungarian firms merged with product-level trade data for the period 1992-2003 to investigate the relation between firms' trading activities (importing, exporting or both) and productivity. We find important self-selection effects of the most productive firms induced by the existence of heterogeneous sunk costs of trade, for both importers and exporters. We relate these sunk costs of trade to the relationship-specific nature of the trade activities, entailing a certain degree of technological and organizational complexity as measured by a number of proxies. We also show that, to the extent that imports and exports are correlated within firms, failing to control for the importing activity leads to overstated average productivity premia of exporters.

Keywords: trade openness; firms' heterogeneity; productivity (search for similar items in EconPapers)
JEL-codes: F12 F14 L25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-int
Date: Written
View citations in EconPapers

Downloads: (external link)
http://econ.core.hu/file/download/mtdp/MTDP0914.pdf (application/pdf)

Related works:
Working Paper: Trade Complexity and Productivity (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:has:discpr:0914

Access Statistics for this paper

More papers in IEHAS Discussion Papers from Institute of Economics, Hungarian Academy of Sciences
Contact information at EDIRC.
Series data maintained by Zsuzsa Balabán ().