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

23 Pages Posted: 17 May 2007

See all articles by Helmut Fryges

Helmut Fryges

Technopolis Group; University of Tasmania - Australian Innovation Research Centre; Center for European Economic Research (ZEW)

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

Multiple version iconThere are 2 versions of this paper

Date Written: May 2007

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

JEL Classification: F14, F23, L60

Suggested Citation

Fryges, Helmut and Wagner, Joachim, Exports and Productivity Growth: First Evidence from a Continuous Treatment Approach (May 2007). IZA Discussion Paper No. 2782, Jena Economic Research Paper No. 2007-063, Available at SSRN: https://ssrn.com/abstract=987027

Helmut Fryges

Technopolis Group ( email )

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Germany

University of Tasmania - Australian Innovation Research Centre ( email )

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Center for European Economic Research (ZEW) ( email )

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Joachim Wagner (Contact Author)

University of Lueneburg - Institute of Economics ( email )

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IZA Institute of Labor Economics

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