Exports versus FDI in German manufacturing: firm performance and participation in international markets

Jens Matthias Arnold () and Katrin Hussinger ()

No 2006,04, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre

Abstract: This paper tests some of the predictions of recent advances in trade theory that have focused on different trade patterns of firms within the same sector. Helpman, Melitz and Yeaple (2005) develop a model in which innate productivity differences between firms determine the degree of international engagement of firms: The least productive firms produce for the domestic market, better performers engage in export activities, and the top firms establish foreign subsidiaries. Using German firm-level data from 1996 to 2002, we test this prediction using non-parametric methods, by examining the distribution functions of the three subsets of firms for stochastic dominance. Rather than just comparing first moments, this technique allows us to compare productivity over the entire distribution. Our results show robust support for the prediction from theory. --

Keywords: Export; FDI; Heterogeneous firms; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: F14 F23 F21 D24 L60 F10 D21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-int
Date: 2006
View list of references View citations in EconPapers

Downloads: (external link)
http://econstor.eu/bitstream/10419/19632/1/200604dkp.pdf (application/pdf)

Related works:
Working Paper: Exports versus FDI in German Manufacturing: Firm Performance and Participation in International Markets (2005)
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:zbw:bubdp1:4241

Access Statistics for this paper

More papers in Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre
Contact information at EDIRC.
Series data maintained by ZBW - German National Library for Economics ().