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Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach

Helmut Fryges () and Joachim Wagner ()
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Helmut Fryges: ZEW Mannheim

No 2782, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A recent survey of 54 micro-econometric studies reveals that exporting firms are more productive than non-exporters. On the other hand, previous empirical studies show that exporting does not necessarily improve productivity. One possible reason for this result is that most previous studies are restricted to analysing the relationship between a firm’s export status and the growth of its labour productivity, using the firms’ export status as a binary treatment variable and comparing the performance of exporting and non-exporting firms. In this paper, we apply the newly developed generalised propensity score (GPS) methodology that allows for continuous treatment, that is, different levels of the firms’ export activities. Using the GPS method and a large panel data set for German manufacturing firms, we estimate the relationship between a firm’s export-sales ratio and its labour productivity growth rate. We find that there is a causal effect of firms’ export activities on labour productivity growth. However, exporting improves labour productivity growth only within a sub-interval of the range of firms’ export-sales ratios.

Keywords: labour productivity; continuous treatment; dose-response function; export-sales ratio (search for similar items in EconPapers)
JEL-codes: F14 F23 L60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-int
Date: 2007-05
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Published in: Review of World Economics, 2008, 144 (4), 695-722

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Journal Article: Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach (2008) Downloads
Working Paper: Exports and Productivity Growth - First Evidence from a Continuous Treatment Approach (2007) Downloads
Working Paper: Exports and Productivity Growth – First Evidence from a Continuous Treatment Approach (2007) Downloads
Working Paper: Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach (2007) Downloads
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