The Politics of Productivity: Differences in Exporting Firms Across Domestic Contexts

Abstract

AbstractPolitical economists have paid increasing attention to distinctions between exporting and nonexporting firms, particularly with regard to their preferences on trade policy liberalization. A multitude of past studies focusing on economically advanced democracies characterized exporters as a small, elite group of large and highly productive firms, but this profile of a prototypical exporter is not necessarily representative of the body of firms operating under different domestic contexts. Using current and methodologically consistent cross-national surveys of firms conducted by the World Bank, this paper re-evaluates the link between certain firm-level characteristics and firms’ propensity to export, taking into account how national-level political, economic, and geographic conditions affect these relationships. The pooled sample of firms from approximately 100 countries spanning different political regimes and levels of development confirms that, generally speaking, exporters are large, productive, and innovative. However, in less democratic and less developed settings, productivity and innovation do not appear to be a prerequisite to export orientation. When developing generalizable theories of firms’ participation in the policymaking process, we must therefore be careful not to treat export behavior as an unqualified predictor of pro-free-trade attitudes.