The Exporter Productivity Premium Along the Productivity Distribution: First Evidence from a Quantile Regression Approach for Fixed Effects Panel Data Models

20 Pages Posted: 24 Aug 2010

See all articles by David Powell

David Powell

RAND Corporation

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Abstract

An emerging literature on international activities of heterogeneous firms documents that exporting firms are more productive than firms that only sell on the national market. This positive exporter productivity premium shows up in a large number of empirical studies after controlling for observed and unobserved firm characteristics in regression models including firm fixed effects. These studies test for a difference in productivity between exporters and non-exporters at the conditional mean of the productivity distribution. However, if firms are heterogeneous, it is possible that the size of the premium varies over the productivity distribution. In this paper we apply a newly developed estimator for fixed-effects quantile regression models to estimate the exporter productivity premium at quantiles of the productivity distribution for manufacturing enterprises in Germany, one of the leading actors in the world market for goods. We show that the premium decreases over the quantiles – a dimension of firm heterogeneity that cannot be detected through mean regression.

Keywords: exporter productivity premium, quantile regression, fixed effects

JEL Classification: F14, C21, C23

Suggested Citation

Powell, David and Wagner, Joachim, The Exporter Productivity Premium Along the Productivity Distribution: First Evidence from a Quantile Regression Approach for Fixed Effects Panel Data Models. IZA Discussion Paper No. 5112, Available at SSRN: https://ssrn.com/abstract=1663132

David Powell (Contact Author)

RAND Corporation ( email )

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Joachim Wagner

University of Lueneburg - Institute of Economics ( email )

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IZA Institute of Labor Economics

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