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

Hemlut Fryges () and Joachim Wagner ()
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Hemlut Fryges: Centre of Economic Research, Mannheim

No 49, Working Paper Series in Economics from University of Lüneburg, Institute of Economics

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: Export-sales ratio; labour productivity; continuous treatment; dose-response function (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
Date: 2007-05
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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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