This paper analyses the relationship between firm productivity and export behavior in German manufacturing firms. We examine whether productivity increases the probability of exporting, and assert that there is a causal relationship from high productivity to entering foreign markets, as postulated by the recent literature on international trade with heterogeneous firms. In estimating productivity, we control for a possible simultaneity bias by using semiparametric estimation techniques. Moreover, we apply a matching technique in order to analyze whether the presence in international markets enabled 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 productivity improvements.

Arnold, Jens Matthias und Katrin Hussinger (2004), Export Behavior and Firm Productivity in German Manufacturing A Firm-level Analysis, ZEW Discussion Paper No. 04-12, Mannheim, erschienen in: Review of World Economics (Weltwirtschaftliches Archiv). Download


Arnold, Jens Matthias
Hussinger, Katrin


Total Factor Productivity; Exports; Export-led growth; Heterogeneous firms.