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Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade

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Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade. / Smeets, Valerie Anne Rolande; Warzynski, Frederic Michel Patrick.

Aarhus : Department of Economics and Business, Aarhus University, 2011.

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@techreport{8be3ed45e252468bab85b79fcf47401a,
title = "Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade",
abstract = "In this paper, we analyze the relationship between exports, imports and firm productivity. We use a rich product-firm-level dataset providing both revenue and quantities of all products for a large panel of Danish manufacturing firms over the period 1998-2008 and link it to firms{\textquoteright} international trade transactions by product. We use our detailed product level information to compute a firm level deflator and avoid the criticism of biased estimates due to the use of industry level deflator. We find that both importing and exporting behaviours are strongly associated with productivity, but firms involved in both importing and exporting are the most productive. We also find evidence of a self-selection into importing and exporting but no learning effect. Finally, we try to distinguish between cost effect and product quality effect by analyzing the importance of the origin of imports and the destination of exports. We find that both imports from countries with abundant and cheap labor like China and from countries with similar level of development matter, although the mechanism through which productivity is affected is likely to be different. In addition, exporting to more distant OECD economies is more strongly associated to productivity than exporting to neighboring or other EU countries, especially when controlling for the price specific effect.",
author = "Smeets, {Valerie Anne Rolande} and Warzynski, {Frederic Michel Patrick}",
year = "2011",
language = "English",
isbn = "9788778825858",
publisher = "Department of Economics and Business, Aarhus University",
type = "WorkingPaper",
institution = "Department of Economics and Business, Aarhus University",

}

RIS

TY - UNPB

T1 - Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade

AU - Smeets, Valerie Anne Rolande

AU - Warzynski, Frederic Michel Patrick

PY - 2011

Y1 - 2011

N2 - In this paper, we analyze the relationship between exports, imports and firm productivity. We use a rich product-firm-level dataset providing both revenue and quantities of all products for a large panel of Danish manufacturing firms over the period 1998-2008 and link it to firms’ international trade transactions by product. We use our detailed product level information to compute a firm level deflator and avoid the criticism of biased estimates due to the use of industry level deflator. We find that both importing and exporting behaviours are strongly associated with productivity, but firms involved in both importing and exporting are the most productive. We also find evidence of a self-selection into importing and exporting but no learning effect. Finally, we try to distinguish between cost effect and product quality effect by analyzing the importance of the origin of imports and the destination of exports. We find that both imports from countries with abundant and cheap labor like China and from countries with similar level of development matter, although the mechanism through which productivity is affected is likely to be different. In addition, exporting to more distant OECD economies is more strongly associated to productivity than exporting to neighboring or other EU countries, especially when controlling for the price specific effect.

AB - In this paper, we analyze the relationship between exports, imports and firm productivity. We use a rich product-firm-level dataset providing both revenue and quantities of all products for a large panel of Danish manufacturing firms over the period 1998-2008 and link it to firms’ international trade transactions by product. We use our detailed product level information to compute a firm level deflator and avoid the criticism of biased estimates due to the use of industry level deflator. We find that both importing and exporting behaviours are strongly associated with productivity, but firms involved in both importing and exporting are the most productive. We also find evidence of a self-selection into importing and exporting but no learning effect. Finally, we try to distinguish between cost effect and product quality effect by analyzing the importance of the origin of imports and the destination of exports. We find that both imports from countries with abundant and cheap labor like China and from countries with similar level of development matter, although the mechanism through which productivity is affected is likely to be different. In addition, exporting to more distant OECD economies is more strongly associated to productivity than exporting to neighboring or other EU countries, especially when controlling for the price specific effect.

M3 - Working paper

SN - 9788778825858

BT - Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade

PB - Department of Economics and Business, Aarhus University

CY - Aarhus

ER -