Review of World Economics

, Volume 142, Issue 4, pp 695–719

Exports, FDI, and Productivity: Dynamic Evidence from Japanese Firms



This paper examines the relationship between exports, foreign direct investment, and firm productivity. Using longitudinal panel data on Japanese firms, it is found that the most productive firms engage in exports and foreign direct investment, medium productive firms engage in either exports or foreign direct investment, and the least productive firms focus only on the domestic market. Moreover, exports and foreign direct investment appear to improve firm productivity once the productivity convergence effect is controlled for. Firms that retain a presence in foreign markets, either by exports or foreign direct investment, show the highest productivity growth, which contributes to improvements in national productivity.


Multinational enterprises panel data firm heterogeneity total factor productivity firm survival 


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Copyright information

© The Kiel Institute 2006

Authors and Affiliations

  1. 1.Faculty of EconomicsKeio UniversityTokyoJapan
  2. 2.Yokohama National UniversityYokohamaJapan

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