Do Portuguese manufacturing firms self select to exports?

Investigacion Economica, 2013

Using a longitudinal database (1996-2003) at the plant level, this article aims to shed light on the proposition that most productive domestic firms self-select to export markets. Self-selection and learning by exporting are two non-mutually-exclusive theses that attempt to explain the high correlation between firms' international trade involvement and their superior performance relative to domestic firms. In general, we find evidence of a self-selection to exports. However, there is significant heterogeneity of sales destinations, firm import status before exporting, and the specificities of the sectors firms belong to.

FEP Working Papers, 2010

Using a longitudinal database (1996-2003) at the plant level, this paper aims to shed light on the causal nexus between international trade engagement and productivity in Portugal. We analyse in particular the learning-by-exporting hypotheses. In line with recent empirical literature, ...

2013

International Economics and Economic Policy, 2013

By combining economic and financial data for Portuguese manufacturing firms with data of their exports and imports, we uncover some aspects of the relationship between international trade engagement and firms' performance. In line with recent theoretical and empirical developments in the international trade literature: (i) we testify that Portuguese international trade is highly concentrated, especially on the import side, and both in inter-and intra-sector terms; (ii) we corroborate previous studies and theses according to which two-way traders outperform only importers, only exporters and above all domestic firms; (iii) we find that the greater the diversification of markets and goods (especially with regard to imports) the better the performance achieved by internationalized firms; (iv) we also present evidence that destination markets, for exports, and, origin markets, for imports, are also important in explaining the performance of firms.

The Journal of International Trade & Economic Development, 2012

Using a longitudinal database (1996-2003) at the plant level, this paper aims to shed light on the causal nexus between international trade engagement and productivity in Portugal. We analyse in particular the learning-by-exporting hypotheses. In line with recent empirical literature, we apply mainly the Propensity Score Matching and a differences-indifferences estimator. In post-entry years we find a higher growth of labour productivity and total factor productivity for new exporting firms when compared to firms that, although having similar characteristics, have decided not to begin exporting in that year. Moreover, in an attempt to uncover the channels through which the learning effects are driven to new exporters, we applied the same methodology to some sub-samples. We found that learning effects are higher for new exporters that are also importers or start importing at the same time. Other important factors influencing that learning ability are found in firms that export to more developed markets, in those that achieve a certain threshold of export intensity and particularly for those firms that belong to sectors in which Portugal is at a comparative disadvantage.

2010

1 International trade involvement and performance of Portuguese manufacturing firms: causal links Armando Silva,* Oscar Afonso,† and Ana Paula Africano‡ Abstract ... as the residual of aCobb-Douglas production function where the firm value added is the independent variable ...

Investigación Económica, 2016

There are a vast number of studies on the relationship between R&D and exports. However, the results are not always clear-cut. This study evaluates whether, in the case of a small, open and peripheral country in which exports are the engine of economic growth despite a noticeable laggardness in terms of R&D, the firms' R&D impacts on and/or is influenced by their exports, as well as whether the interrelation between R&D and exports impacts on the performance of firms. Using an unique dataset comprising all (more than 340 thousands) non-financial companies based in Portugal, over the period 2006-2012, estimations based on bivariate probit models, which provide the simultaneous estimation of the two decisions (R&D and exports), taking into account the correlation between the estimation errors of the equations for R&D and exports, confirm there is complementarity between R&D and exports, which means that engaging in R&D activities will increase the firm's probability of engaging in export activities. Additionally, engaging in export activities will also increase the probability of engaging in R&D. The results also provide support for the hypothesis that more productive firms self-select into exporting activities and also provide support for the learning-by-exporting hypothesis. Finally, based on a panel model we further found that R&D and exports have a positive effect on sales growth, which is enhanced when both activities occur simultaneously.

Structural Change and Economic Dynamics, 2019

This paper analyses the process of internationalisation of firms, in the context of heterogeneous firms. The study aims to integrate the literature focused on the ex ante superiority of exporter firms, the selfselection hypothesis, with the literature dedicated to depict the impact of exporting on firm performance, the learning-by-exporting hypothesis. Using a survey of Spanish manufacturing firms, we analyse the six years previous to the entry into export markets and the first six years of exporting of new exporter firms, and we compare their performance with that of domestic firms. The results suggest that starting to export is correlated to a significant increase in size, both in terms of sales and employees. Moreover, we find a significant improvement in the worker's labour conditions, measured as the percentage of employees with permanent contracts, following the entry into export markets. Finally, despite new exporter firms being more productive than domestic firms, the productivity differential does not follow a constant path. Instead, we find a U-shape trend in the productivity differential between domestic and new exporter firms.

Review of World Economics, 2007

There is extensive empirical evidence pointing to the existence of sunk costs to exporting. Only higher productivity firms can profitably cover these and enter export markets. This is the standard explanation for the regularity with which econometric analyses of the characteristics of exporters report that they are more productive than non-exporters. But what happens to their productivity trajectory once they have entered? Theory points to the possibility of a further productivity boost, attributable to the effects of learning and competition, though as yet there is little empirical support for this. We investigate whether this is because the potential for this boost depends apon how exposed to competition the industry in which entry takes place is. We find that industry differences are important in determining whether learning effects boost productivity after export market entry.

Review of World Economics, 2012

The literature on firm heterogeneity and trade has highlighted that most trading firms tend to engage in both importing and exporting activities. This may be due to some common sunk costs or to a true state dependence. This paper provides some evidence that helps sort this issue out. Using firm level data for a group of 27 Eastern European and Central Asian countries from the World Bank Business Environment and Enterprise Performance Survey (BEEPS) over the period 2002-2008, we estimate a bivariate probit model of exporting and importing. The main finding is that there is a positive correlation between import and export at the level of the firm, but after controlling for size (and other firm level characteristics) importing have a positive effect on exporting, but exporting to not increase the probability of importing. The evidence is thus consistent with the presence of common sunk costs and with a one-way link between importing and exporting. The positive effect of import on export is mainly due to an increase in firm productivity and product innovation