Firm Productivity, Technological Heterogeneity and Endogenous Exports

26 Pages Posted: 6 Nov 2017

See all articles by Emir Malikov

Emir Malikov

University of Nevada, Las Vegas

Date Written: October 10, 2017

Abstract

Exporters tend to be more productive than non-exporting firms, and uncovering the extent of these productivity differentials as well as causes thereof has long been one of the core topics in the literature. This paper focuses on the issues pertaining to robust empirical modeling of the intricate endogenous relationship between the firm’s export behavior and its productivity. I provide a new synthesized (nonparametric) methodology for the structural control-function-based identification of unobserved firm productivity in the presence of (i) endogenous self-selection into export markets, (ii) dependence of productivity evolution on the firm’s past export experiences and (iii) potential technological heterogeneity in the production of for-export and for-domestic-sale outputs. The model offers a useful addition to the toolkit of practitioners interested in studying the nexus between firm productivity and export behavior. I showcase the proposed methodology by applying it to the firm-level data on China’s apparel industry, one of the country’s most export-oriented manufacturing sectors, during the 1999–2006 period.

Keywords: Control Function, Export, Production Function, Productivity, Proxy, Selectivity

JEL Classification: C23, D24, F10, L10

Suggested Citation

Malikov, Emir, Firm Productivity, Technological Heterogeneity and Endogenous Exports (October 10, 2017). Available at SSRN: https://ssrn.com/abstract=3064866 or http://dx.doi.org/10.2139/ssrn.3064866

Emir Malikov (Contact Author)

University of Nevada, Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

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