Geishecker, Ingo Schröder, Philipp J.H. Sörensen, Allan
Year of Publication:
CESifo Working Paper 4630
Why is it that exporter productivity premia (EPP) differ so widely in size? We take this question to the theory and to the data. We derive the sectoral EPP in a standard heterogeneous firms trade model and apply the insights from the model to 13 years of data for all Danish manufacturing firms. We show that a significant share of the observed variation in EPPs across sectors, and hence across countries, can be explained by the variation in productivity dispersion, trade costs and the elasticity of substitution.
intra-industry trade exporter productivity firm-level data heterogeneous firms