Export Status and Productivity Performance: Evidence from Matched Italian Firms

Abstract:     
This paper explores the two alternative hypotheses of "self-selection" and "learning by exporting" across different Italian manufacturing firms. Using matched sampling techniques that control for selection bias, we estimate whether new export-oriented firms are more efficient than domestic market-oriented firms are, by using three representative Surveys of Italian manufacturing firms covering consecutive triennial periods (1995-2003). By matching new exporting firms and non-exporters, our findings indicate that export entrants improve their productivity in the first period after entry although this effect vanishes in the subsequent period. This occurs for both total factor productivity (TFP) and labor productivity growth rates. Our evidence also suggests that new exporters earn higher profits than their domestic counterparts do.

Number of Pages in PDF File: 48

Keywords: international trade, export-led growth, productivity, matched techniques

JEL Classification: F11, F14, O12, C22

working papers series