Exports versus FDI in German Manufacturing: Firm Performance and Participation in International Markets

Jens Matthias Arnold () and Katrin Hussinger ()

No 05-73, ZEW Discussion Papers from ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research

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: Exports; FDI; Heterogeneous firms; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: L60 F10 F14 F23 D24 F21 D21 (search for similar items in EconPapers)
Date: 2005
View list of references View citations in EconPapers

Downloads: (external link)
http://econstor.eu/bitstream/10419/24169/1/dp0573.pdf (application/pdf)

Related works:
Working Paper: Exports versus FDI in German manufacturing: firm performance and participation in international markets (2006)
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:zewdip:4556

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research
Contact information at EDIRC.
Series data maintained by ZBW - German National Library for Economics ().