Skip to main content

Export Behavior and Firm Productivity in German Manufacturing: A Firm-Level Analysis

Review of World Economics volume 141, pages 219–243 (2005)Cite this article

Abstract

This paper examines the causal relationship between productivity and exporting in German manufacturing. We find a causal link from high productivity to presence in foreign markets, as postulated by a recent literature on international trade with heterogeneous firms. We apply a matching technique in order to analyze whether the presence in international markets enables firms to achieve further productivity improvements, without finding significant evidence for this. We conclude that high-productivity firms self-select themselves into export markets, while exporting itself does not play a significant role for the productivity of German firms.

This is a preview of subscription content, access via your institution.

Access options

Buy single article

Instant access to the full article PDF.

USD 39.95

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

References

  1. Almus, M., and D. Czarnitzki (2003). The Effects of Public R&D Subsidies on Firms’ Innovation Activities: The Case of Eastern Germany. Journal of Business and Economic Statistics 21 (2): 226–236.

    Google Scholar 

  2. Aw, B. Y., S. Chung, and M. Roberts (2000). Productivity and Turnover in the Export Market: Micro Evidence from Taiwan and South Korea. World Bank Economic Review 14 (1): 65–90.

    Google Scholar 

  3. Ben-David, D. (1993). Equalizing Exchange: Trade Liberalization and Income Convergence. Quarterly Journal of Economics 108 (3): 653–679.

    Google Scholar 

  4. Bernard, A. B., and B. Jensen (1999). Exceptional Exporter Performance: Cause, Effect, or Both? Journal of International Economics 47 (1): 1–25.

    Google Scholar 

  5. Bernard, A. B., and B. Jensen (2004a). Exporting and Productivity in the USA. Oxford Review of Economic Policy 20 (3): 343–357.

    Google Scholar 

  6. Bernard, A. B., and B. Jensen (2004b). Why Some Firms Export. Review of Economics and Statistics 86 (2): 561–569.

  7. Bernard, A. B., and J. Wagner (1997). Exports and Success in German Manufacturing. Review of World Economics/Weltwirtschaftliches Archiv 133 (1): 134–137.

    Google Scholar 

  8. Bernard, A. B., and J. Wagner (2001). Export Entry and Exit by German Firms. Review of World Economics/Weltwirtschaftliches Archiv 137 (1): 105–123.

    Google Scholar 

  9. Bernard, A. B., J. Eaton, B. Jensen, and S. Kortum (2003). Plants and Productivity in International Trade. American Economic Review 93 (4): 1268–1290.

    Google Scholar 

  10. Bigsten, A., P. Collier, S. Dercon, M. Fafchamps, B. Gauthier, J. W. Gunning, J. Habarurema, A. Oduro, R. Oostendorp, C. Pattillo, M. Söderbom, F. Teal, and A. Zeufack (2004). Do African Manufacturing Firms Learn from Exporting? Journal of Development Studies 40 (3): 115–141.

    Google Scholar 

  11. Blundell, R., and M. Costa Dias (2000). Evaluation Methods for Non-Experimental Data. Fiscal Studies 21 (4): 427–468.

    Google Scholar 

  12. Castellani, D. (2002). Export Behavior and Productivity Growth: Evidence from Italian Manufacturing Firms. Review of World Economics/Weltwirtschaftliches Archiv 138 (4): 605–628.

    Google Scholar 

  13. Clerides, S. K., S. Lach, and J. Tybout (1998). Is Learning-by-Exporting Important? Micro-Dynamic Evidence from Colombia, Morocco, and Mexico. Quarterly Journal of Economics 113 (3): 903–947.

    Google Scholar 

  14. Czarnitzki, D. (2005). The Extent and Evolution of the Product Deficiency in Eastern Germany. Forthcoming in Journal of Productivity Analysis.

  15. Delgado, M., J. C. Fariñas, and S. Ruano (2002). Firm Productivity and Export Markets: A Nonparametric Approach. Journal of International Economics 57 (2): 397–422.

    Google Scholar 

  16. Girma, S., D. Greenaway, and R. Kneller (2004). Does Exporting Lead to Better Performance? A Microeconometric Analysis of Matched Firms. Review of International Economics 12 (5): 855–866.

    Google Scholar 

  17. Gottschalk, S. (2002). Anonymisierung von Unternehmensdaten. ZEW Discussion Paper 02-23. Centre for European Economic Research, Mannheim.

  18. Hallward-Driemeier, M., G. Iarossi, and K. Sokoloff (2002). Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data. NBER Working Paper 8894. National Bureau of Economic Research, Cambridge, Mass.

  19. Head, K., and J. Ries (2003). Heterogeneity and the FDI versus Export Decision of Japanese Manufacturers. Journal of the Japanese and International Economies 17 (4): 448–467.

    Google Scholar 

  20. Heckman, J. J., R. Lalonde, and J. A. Smith (1999). The Economics and Econometrics of Active Labor Market Programs. In A. Ashenfelter and D. Card (eds.), Handbook of Labor Economics 3. Amsterdam: North-Holland.

  21. Janz, N., G. Ebling, S. Gottschalk, and H. Niggemann (2001). The Mannheim Innovation Panels (MIP and MIP-S) of the Centre for European Economic Research (ZEW). Schmollers Jahrbuch – Zeitschrift für Wirtschafts- und Sozialwissenschaften 121 (1): 123–129.

  22. Kraay, A. (1999). Exportations et Performances Economiques: Etude d’un Panel d’Entreprises Chinoises. Revue d’Economie du Développement 7 (1–2): 183–207.

  23. Leuven, E., and Sianesi, B. (2003). PSMATCH2: Stata Module to Perform Full Mahalanobis and Propensity Score Matching, Common Support Graphing, and Covariate Imbalance Testing. Version 1.2.0, http://ideas.repec.org/c/boc/bocode/s432001.html.

  24. Marin, D. (1992). Is the Export-Led Growth Hypothesis Valid for Industrialized Countries? Review of Economics and Statistics 74 (4): 678–688.

    Google Scholar 

  25. Marschak, J., and W. H. Andrews (1944). Random Simultaneous Equations and the Theory of Production. Econometrica 12 (3/4): 133–205.

    Google Scholar 

  26. Melitz, M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica 71 (6): 1695–1726.

    Google Scholar 

  27. Melitz, M. J., and G. I. P. Ottaviano (2003). Market Size, Trade, and Productivity. Mimeo, Harvard University.

  28. Olley, S., and A. Pakes (1996). The Dynamics of Productivity in the Telecommunications Equipment Industry. Econometrica 64 (6): 1263–1297.

    Google Scholar 

  29. Pavcnik, N. (2002). Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants. Review of Economic Studies 69 (1): 245–276.

    Google Scholar 

  30. Roberts, M. J., and J. Tybout (1997). The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs. American Economic Review 87 (4): 545–564.

    Google Scholar 

  31. Rosenbaum, P. R., and D. Rubin (1983). The Central Role of the Propensity Score in Observational Studies for Causal Effects. Biometrika 70 (1): 41–55.

    Google Scholar 

  32. Sachs, J., and A. Warner (1995). Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity (1): 1–118.

  33. Wagner, J. (2002). The Causal Effects of Exports on Firm Size and Labor Productivity: First Evidence from a Matching Approach. Economics Letters 77 (2): 287–292.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Bocconi University, Milan, Italy

    Jens Matthias Arnold

  2. Centre for European Economic Research (ZEW), Mannheim, Germany

    Katrin Hussinger

Authors
  1. Jens Matthias Arnold
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Katrin Hussinger
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Katrin Hussinger.

Additional information

JEL no.

F10, F13, F14, D21, L60

About this article

Cite this article

Arnold, J., Hussinger, K. Export Behavior and Firm Productivity in German Manufacturing: A Firm-Level Analysis. Rev. World Econ. 141, 219–243 (2005). https://doi.org/10.1007/s10290-005-0026-8

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10290-005-0026-8

Keywords

  • Exports
  • export-led growth
  • total factor productivity
  • heterogeneous firms