Abstract
A vast literature on the international activities of heterogeneous firms finds the existence of a positive exporter productivity premium. On average, exporting firms are more productive than firms that sell on the national market only. The Melitz (Econometrica 71:1695–1725, 2003) model, however, has implications for not only mean differences but also differences in the distribution of productivity. Furthermore, exporting firms may be different from non-exporting firms for reasons that are not included in the Melitz model. We believe that conditioning on firm fixed effects and studying the distribution of productivity are both necessary for empirical tests of the Melitz model. This paper is the first to employ a new quantile estimation technique for panel data introduced in Powell (Did the economic stimulus payments of 2008 reduce labor supply? Evidence from quantile panel data estimation. RAND Corporation Publications Department, Santa Monica, 2014). We find that the premium is positive at all productivity levels, but highest at the lowest quantiles. These results support theoretical models which suggest that there is a division in productivity between exporters and non-exporters.
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Notes
For a discussion of the differences in exporting between West German and East German manufacturing firms see Wagner (2008).
The survey has information about investment that might be used to approximate the capital stock. A close inspection of the investment data, however, reveals that many firms report no or only a very small amount of investment in many years, while others report huge values in 1 year. Any attempt to compute a capital stock measure based on these data would result in a proxy that seems to be useless.
Note that Bartelsman and Doms (2000) point to the fact that heterogeneity in labor productivity has been found to be accompanied by similar heterogeneity in total factor productivity in the reviewed research where both concepts are measured. Furthermore, Foster et al. (2008) show that productivity measures that use sales (i.e., quantities multiplied by prices) and measures that use quantities only are highly positively correlated. In a recent comprehensive survey Syverson (2011) argues that “(t)he inherent variation in establishment- or firm-level microdata is typically so large as to swamp any small measurement-induced differences in productivity metrics. Simply put, high-productivity producers will tend to look efficient regardless of the specific way that their productivity is measured.”
Due to the restricted nature of our data, some cells are confidential and summary statistics cannot be reported.
The same holds for all other years in the sample period; results are available from the second author on request.
The percentage value is computed from the estimated regression coefficient \(\beta \) as \(100(e^{\beta }-1)\).
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Acknowledgments
We thank Daniel Trefler, Philipp Schröder, and Alan Sörensen for helpful comments and discussions. All computations were done in the research data centre of the Statistical Office in Berlin using Stata Version 11. The data used are confidential but not exclusive; information on how to access the data is provided in Zühlke et al. (2004). To facilitate replication and extensions Stata code for QRPD is available from the first author, and the Stata do-files used to compute the empirical results in the application are available from the second author on request.
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Powell, D., Wagner, J. The exporter productivity premium along the productivity distribution: evidence from quantile regression with nonadditive firm fixed effects. Rev World Econ 150, 763–785 (2014). https://doi.org/10.1007/s10290-014-0192-7
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DOI: https://doi.org/10.1007/s10290-014-0192-7