Efficiency, innovation and exports *

Efficiency, innovation and exports * I. Introduction There is a long history of empirical testing of trade theory based on data aggregated to a sectoral level, with somewhat mixed results ( Bowen and Sveikauskas, 1992 ; Leamer and Levinsohn, 1995 ). Very recently, there has been considerable interest in the export activity of individual firms. The major issue is whether firms' efficiency is significantly improved by the experience of competing in foreign markets. The empirical findings on this have been uniformly negative, although it has emerged that exporting firms are significantly different from non‐exporters. Not only are exporting firms larger in size than non‐exporters, but they also appear to be superior according to most measures of efficiency. These findings, which have emerged from research on firms in Germany, the United States and some developing countries, have been rationalised in terms of a fixed cost of exporting which less efficient firms do not find worth paying ( Aitken , 1997 ; Bernard and Jensen, 1999 ; Bernard and Wagner, 1997 ; Clerides , 1998 ; and Roberts and Tybout, 1997 ). Our first aim here is to replicate these tests of the efficiency/export relationship for a sample of UK firms. We fail to find http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Oxford Bulletin of Economics & Statistics Wiley

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Publisher
Wiley
Copyright
Copyright © 2002 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0305-9049
eISSN
1468-0084
DOI
10.1111/1468-0084.00001
Publisher site
See Article on Publisher Site

Abstract

I. Introduction There is a long history of empirical testing of trade theory based on data aggregated to a sectoral level, with somewhat mixed results ( Bowen and Sveikauskas, 1992 ; Leamer and Levinsohn, 1995 ). Very recently, there has been considerable interest in the export activity of individual firms. The major issue is whether firms' efficiency is significantly improved by the experience of competing in foreign markets. The empirical findings on this have been uniformly negative, although it has emerged that exporting firms are significantly different from non‐exporters. Not only are exporting firms larger in size than non‐exporters, but they also appear to be superior according to most measures of efficiency. These findings, which have emerged from research on firms in Germany, the United States and some developing countries, have been rationalised in terms of a fixed cost of exporting which less efficient firms do not find worth paying ( Aitken , 1997 ; Bernard and Jensen, 1999 ; Bernard and Wagner, 1997 ; Clerides , 1998 ; and Roberts and Tybout, 1997 ). Our first aim here is to replicate these tests of the efficiency/export relationship for a sample of UK firms. We fail to find

Journal

Oxford Bulletin of Economics & StatisticsWiley

Published: Feb 1, 2002

References

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