One
of the stylized facts emerging from the literature on the
microeconometrics of international firm activities is that
firms which engage in foreign trade are more productive
than firms selling only in the national market, and that
firms with foreign direct investments (FDI) are even more
productive than exporters. Germany is a case in point. Using
different data sets, Bernard and Wagner (1997), Wagner (2007b),
and Arnold and Hussinger (2005a) show that exporters are
more productive than non-exporters from the same industry.
Wagner (2006b) and Arnold and Hussinger (2005b), again using
different data sets, find that the productivity distribution
of firms selling only on the national market is stochastically
dominated by the productivity distribution of exporters,
which in turn, is dominated by the productivity distribution
of firms that are foreign direct investors. This shows that
the productivity differences exist not only at the mean,
but all over the distribution.
Regarding
the direction of causality between productivity and international
firm activities, the picture emerging from the empirical
literature is less clear. However, details aside, the evidence
points at the self-selection of more productive firms into
export markets, while exporting does not necessarily improve
productivity. Note that in the theoretical models of heterogeneous
firms engaging in international trade and foreign direct
investment, which are inspired by the empirical literature
on the microeconometrics of international firm activities,
firm level productivity is modeled as random, taking a draw
from a given distribution (Bernard et al., 2003;
Melitz 2003; and Helpman et al., 2004). |
