Over the Roc Methodology: Productivity, Economic Size and Firms’ Export Thresholds

26 Pages Posted: 5 Jun 2020

See all articles by Stefano Costa

Stefano Costa

ISTAT - Italian National Institute of Statistics; ISAE, Istituto di Studi e Analisi Economica

Federico Sallusti

National Institute of Statistics (Istat)

Claudio Vicarelli

ISTAT - Italian National Institute of Statistics

Davide Zurlo

National Institute of Statistics (Istat)

Date Written: August 2019

Abstract

We identify the minimum combinations of productivity and “economic size” that Italian manufacturing firms need to achieve in order to access international markets. These “export thresholds” are estimated by applying, for the first time in economics, the ROC (receiver operating characteristics) methodology. In this way, we detect a model‐based (rather than a subjectively determined) cut‐off that allows to identify exporters and nonexporters and provides a measure of each firm’s distance from the export threshold. This methodology also paves the way to investigate other determinants of thresholds, thus helping to design more effective policy interventions to reduce barriers to trade.

Keywords: ROC analysis, export threshold, intensive and extensive margin of exports

Suggested Citation

Costa, Stefano and Sallusti, Federico and Vicarelli, Claudio and Zurlo, Davide, Over the Roc Methodology: Productivity, Economic Size and Firms’ Export Thresholds (August 2019). Review of International Economics, Vol. 27, Issue 3, pp. 955-980, 2019, Available at SSRN: https://ssrn.com/abstract=3618534 or http://dx.doi.org/10.1111/roie.12405

Stefano Costa (Contact Author)

ISTAT - Italian National Institute of Statistics ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

ISAE, Istituto di Studi e Analisi Economica ( email )

Piazza dell' Indipendenza 4
I-00185
Italy

Federico Sallusti

National Institute of Statistics (Istat) ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

Claudio Vicarelli

ISTAT - Italian National Institute of Statistics ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

Davide Zurlo

National Institute of Statistics (Istat) ( email )

Via Cesare Balbo 16
00184 Rome, 0185
Italy

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