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The direction of causality between exports and firm performance: microeconomic evidence from Croatia using the matching approach

Miljana Valdec and Jurica Zrnc
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Miljana Valdec: Croatian National Bank, Zagreb, Croatia
Jurica Zrnc: Croatian National Bank, Zagreb, Croatia

Financial Theory and Practice, 2015, vol. 39, issue 1, 1-30

Abstract: This paper contributes to the literature by using propensity score matching to test for causal effects of starting to export on firm performance in Croatian manufacturing firm-level data. The results confirm that exporters have characteristics superior to those of non-exporters. In the main sample specification there is pervasive evidence of self-selection into export markets, meaning that firms are successful years before they become exporters. Using multiple firm performance indicators, panel and cross section data models together with various sample specifications there is scant evidence on learning-by-exporting which holds true only in a few cases. On the other hand, higher sales growth is found to be a more conclusive distinguishing characteristic of new exporters. As in similar studies, we find that a part of the results depends on the number of export starters in the estimation sample.

Keywords: exports; learning-by-exporting; propensity score matching; productivity; self-selection (search for similar items in EconPapers)
JEL-codes: D21 F12 F14 L25 L6 (search for similar items in EconPapers)
Date: 2015
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