Trade complexity and productivity

C A9 Altomonte, Gábor Békés

    Research output: Working paper/PreprintWorking paper

    Abstract (may include machine translation)

    We exploit a panel dataset of Hungarian firms merged with product-level trade data for the period 1992-2003 to investigate the relation between firms’ trading activities (importing, exporting or both) and productivity. We find important self-selection effects of the most productive firms, with seemingly larger fixed costs characterising the importing activity. As a result, failing to control for the importing activity leads to overstated productivity premia of exporters. We are able to attribute the larger self-selection effect of imports to the higher complexity of the latter activity. To this extent we construct some new indexes which evaluate for each firm its fixed costs of trading in terms of number of products, distance of destinations and contractual frictions underlying each trade transaction, and relate those to firms’ productivity.
    Original languageEnglish
    PublisherMICRO-DYN
    Number of pages29
    StatePublished - 2011

    Publication series

    NameMICRO-DYN Working Paper ; 08/11.

    Fingerprint

    Dive into the research topics of 'Trade complexity and productivity'. Together they form a unique fingerprint.

    Cite this