Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71328
Authors: 
McCann, Fergal
Year of Publication: 
2009
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 09/22
Abstract: 
The impact of international trade on firm productivity is tested by accounting for firms' import as well as export status for a large panel of Irish manufacturing firms. Two-way traders and exporters-only are found to be the most productive firms, with a significant gap between them and importersonly and non-traders. tfp is calculated using a modified version of the Olley and Pakes (1996) estimator, taking account of a four-category trade status. Selection of the most productive firms into exporting or importing is not found in any robust sense. Fixed effcts, as well as Propensity Score Matching with Difference in Differences, are used to calculate productivity improvements from entering into international trade. These improvements are found to be highly contingent on export status, with import status being unimportant. The key finding of the paper is that the gains from trade, for Ireland at least, appear to lie on the export side. Interestingly, quitting trade leads to a mirror image effect to that of entry for all trade statuses.
Subjects: 
Trade orientation
heterogeneous firms
Productivity
JEL: 
F10
F14
L25
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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