Summary
The paper tests whether recent theories of international trade with heterogeneous firms can explain the export patterns in Dutch firm- and plant- level data in manufacturing and services. Recent trade models with heterogeneous firms predict that the export decision of firms is affected by sunk entry costs in foreign markets, with only the most productive firms self-selecting into exports. We test a latent variable model of the export decision by probit regressions and standard OLS panel regressions. Our results support the self-selection prediction. The process further appears to be conditioned by scale effects, market structure and multinational affiliation. Regarding alternative explanations, we do not find evidence for the learning-by-exporting hypothesis, even when controlling for the firm’s distance to the international productivity frontier.
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Valuable comments and inputs were received from: Eric Bartelsman, Mathilde Bombardini, Steven Brakman, Rosario Crino, Joze Damijan, Harry Garretsen, Stefanie Haller, Juan Maez, Fergal McCann, Lionel Nesta, Mauro Pisu, Saso Polanec, Maria Rochina, Juan Sanchis, Alexander Vogel, Joachim Wagner and two anonymous referees. Within CPB, the authors have been helped by constructive comments by Stefan Boeters, Harold Creusen, Arjan Lejour, Roger Smeets, Bas Straathof and Bas Ter Weel. The results presented in this report are CPBs calculations on the basis of data files kindly made available by the Centre for Policy Statistics of Statistics Netherlands. The authors have received help from several specialists at Statistics Netherlands including George van Leeuwen, Bert Diederen and Gerhard Meinen. Any remaining flaws in this paper are the responsibility of the authors.
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Kox, H.L.M., Rojas-Romagosa, H. Exports and Productivity Selection Effects for Dutch Firms. De Economist 158, 295–322 (2010). https://doi.org/10.1007/s10645-010-9147-0
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DOI: https://doi.org/10.1007/s10645-010-9147-0