Understanding cross-country differences in exporter premia: comparable evidence for 14 countries

We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: exporters are more productive than non-exporters when observed and unobserved heterogeneity is controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find, consistently with theoretical predictions, that productivity premia are larger in countries with lower export participation rates, with more restrictive trade policies, lower per capita GDP, less effective government and worse regulatory quality, and in countries exporting to relatively more distant markets. Understanding cross-country differences in exporter premia – Comparable Evidence for 14 Countries The International Study Group on Exports and Productivity* [Revision – 1. July 2008] Abstract: We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: exporters are more productive than non-exporters when observed and unobserved heterogeneity is controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find, consistently with theoretical predictions, that productivity premia are larger in countries with lower export participation rates, with more restrictive trade policies, lower per capita GDP, less effective government and worse regulatory quality, and in countries exporting to relatively more distant markets.