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A recent survey of 54 micro-econometric studies reveals that exporting firms are more productive than non-exporters. However, 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.

Item Type:	Refereed Article
Keywords:	Export-sales ratio; labour productivity; continuous treatment; dose-response function
Research Division:	Economics
Research Group:	Applied Economics
Research Field:	Industry Economics and Industrial Organisation
Objective Division:	Economic Framework
Objective Group:	Microeconomics
Objective Field:	Microeconomics not elsewhere classified
Author:	Fryges, HR (Dr Helmut Fryges)
ID Code:	85374
Year Published:	2008
Web of Science® Times Cited:	29
Deposited By:	Australian Innovation Research Centre
Deposited On:	2013-07-02
Last Modified:	2014-02-06
Downloads:	0