Department of Economics and Business Economics

Second Thoughts on Exporter Productivity

Research output: Working paperResearch

Documents

  • Wp09 03

    Final published version, 248 KB, PDF document

  • Allan Sørensen
  • Philipp J.H. Schröder, Aarhus School of Business, University of Aarhus, Denmark
  • School of Economics and Management
Empirical literature has established a positive link between
firm productivity and export status, yet notable exceptions exist.
The present paper shows that the underlying theory (Melitz,
2003) is in fact able to accommodate the rule as well as the
exception. The fulcrum of the argument is the tension between
empirical work measuring productivity based on average cost
information, and theoretical work representing productivity by
marginal cost. In a heterogeneous firms trade model, we compute
productivity based on average cost and find that around the
export-indifferent firm, exporters will be less productive than
non-exporters. Furthermore, we show that this effect may feed
through at the industry level.
Original languageEnglish
Place of publicationAarhus
PublisherAarhus Universitetsforlag
Publication statusPublished - 2009

    Research areas

  • Intra-industry trade, firm productivity, monopolistic competition, heterogeneous firms

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