Trade and technology: new evidence on the productivity sorting of firms
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Recent advances in trade theory suggest novel gains from trade liberalisation through technology adoption by expanding exporting firms. These theories rely on strict assumptions regarding the productivity sorting of firms with different technology use. In this paper, we test the sorting of German firms using data on actually implemented technologies. Our analysis distinguishes between manufacturing and service industries. In case of the former, we confirm the sorting pattern of the most productive firms being high-tech exporters, followed by low-tech exporters and then domestic low-tech firms. For services, the evidence is mixed and potentially depends on the tradability of the considered services.
KeywordsExports Productivity Sorting Information technology Firm-level data
JEL ClassificationF14 F23 F61
We gratefully acknowledge support by the ZEW research programme Strengthening Efficiency and Competitiveness of the European Knowledge Economies (SEEK), financed by the state of Baden-Württemberg. We thank the participants of the corresponding SEEK workshop in Mannheim, the European Trade Study Group conference 2012 in Leuven, the PhD seminar in Industrial Organization at the University of Mannheim, the 9th International Economics Workshop in Aarhus and an anonymous referee for constructive discussions. James Binfield provided helpful research assistance. For further projects of the authors see www.zew.de/staff_ibe, www.zew.de/staff_jhf and www.zew.de/staff_frl as well as the ZEW annual report under www.zew.de.
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