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Entry to Foreign Markets and Productivity: Evidence from a Matched Sample of Turkish Manufacturing Firms

Başak Dalgıç (), Burcu Fazlıoğlu () and Deniz Karaoglan ()
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Deniz Karaoglan: Department of Economics, METU

No 1403, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: We examine the effects of international trading activities of firms on creating productivity gains in Turkey by using a recent firm level dataset over the period 2003-2010. We establish treatment models and investigate the productivity improvements of firms through trade by using Propensity Score Matching (PSM) techniques along with Difference-in-Difference (DID) estimates. Three different groups of treatment are constructed: (i) firms that involve only in importing activities, (ii) firms that involve only in exporting activities, (iii) firms that involve in both exporting and importing activities. The results of the study suggest that both exporting and importing have positive significant effects on total factor productivity (TFP) and labor productivity (LP) of firms. Importing is found to have a greater impact on productivity of firms compared to exporting. Further, two-way trade is found to have more significant effects than those of one-way trade on firm productivity Finally, our results indicate that international trade has greater impact on LP rather than TFP of firms.

Keywords: Productivity; Imports; Exports; Propensity Score Matching. (search for similar items in EconPapers)
JEL-codes: F10 D21 D24 C21 C23 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2014-05, Revised 2014-05
New Economics Papers: this item is included in nep-ara, nep-cse, nep-cwa, nep-eff and nep-int
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Journal Article: Entry to foreign markets and productivity: Evidence from a matched sample of Turkish manufacturing firms (2015) Downloads
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