Exports, Foreign Direct Investment and Productivity: Evidence from German Firm Level Data
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Chronological data
Date of first publication2005-07-06
Date of publication in PubData 2024-08-23
Language of the resource
English
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Abstract
This paper presents the first empirical test with German establishment level data of a hypothesis derived by Helpman, Melitz and Yeaple in a model that explains the decision of heterogeneous firms to serve foreign markets either trough exports or foreign direct investment: only the more productive firms choose to serve the foreign markets, and the most productive among this group will further choose to serve these markets via foreign direct investments. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of foreign direct investors dominates that of exporters, which in turn dominates that of national market suppliers.
Keywords
Exports; Foreign Direct Investment; Productivity; Heterogeneous Firms; Stochastic; Export; Auslandsinvestition; Produktivität; Stochastik
Series title
Number of the series contribution
8