Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19290
Authors: 
Wagner, Joachim
Year of Publication: 
2005
Series/Report no.: 
HWWA Discussion Paper 318
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.
Subjects: 
Exports
foreign direct investment
productivity
heterogeneous firms
stochastic dominance
JEL: 
F23
F14
D21
Document Type: 
Working Paper

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