EXPORTING AND PRODUCTIVITY: THEORY, EVIDENCE AND FUTURE RESEARCH

Abstract

Intervention to support export initiatives is commonplace in both industralized and developing countries. Such intervention is underpinned by the view that exporting is good for growth, typified by the success of the South East Asian tiger economies. Yet, while the evidence is largely macroeconomic, most intervention is microeconomic, targeted at specific firms or industries. Recently a new literature has developed that is microeconomic and microeconometric, exploring determinants of entry into and survival in export markets. Key within this literature is the relationship between firm productivity and exports. This paper reviews the theoretical and empirical contributions to this literature and evaluates its contribution to our understanding of the factors driving export decisions and the consequences of export market entry from both. In addition to assessing the importance of new insights being generated, this paper speculates on new directions in which the research agenda will evolve.