World Economy

While the role of exports in promoting growth in general, and productivity in particular, has been investigated empirically using aggregate data for countries and industries for a long time, only recently have comprehensive longitudinal data at the firm level been used to look at the extent and causes of productivity differentials between exporters and their counterparts which sell on the domestic market only. This paper surveys the empirical strategies applied, and the results produced, in 54 microeconometric studies with data from 34 countries that were published between 1995 and 2006. Details aside, exporters are found to be more productive than non‐exporters, and the more productive firms self‐select into export markets, while exporting does not necessarily improve productivity.

Is it possible that excessive reliance on natural resources affects saving and investment in a way that retards economic growth? – and thus, in the long run, the level of output per capita. This paper reviews the literature, explores the data and compares and contrasts the explanatory power and interplay of natural resources and civil liberties, our proxy for institutional variables currently under scrutiny in the literature. We propose that natural resource dependence may be viewed as an exogenous factor that impedes economic growth and investment as well as institutions, even if we stress that natural resource abundance may be good for growth.

Natural resource‐abundant countries constitute both growth losers and growth winners, and the main difference between the success cases and the cases of failure lies in the quality of institutions. With grabber‐friendly institutions more natural resources push aggregate income down, while with producer‐friendly institutions more natural resources increase income. Such a theory finds strong support in data. A key question we also discuss is if resources in addition alter the quality of institutions. When that is the case, countries with bad institutions suffer a double resource curse – as the deterioration of institutions strengthens the negative effect of more natural resources.

This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge – participation in the export market and investments in R&D and/or worker training – and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo‐genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.

Firm productivity and export decisions are closely related to innovation activity. Innovation may play a more important role in the decision to start exporting, and successful exporting may drive process innovation. This suggests that the causality between innovation and exporting may run in both directions. Using detailed microdata from innovation surveys, industrial production surveys, and trade information for Slovenian firms in 1996–2002, we investigate the bidirectional causal relationship between firm innovation and export activity. We find no evidence for the hypothesis that either product or process innovations increase the probability of becoming a first‐time exporter, but we do find evidence in both the innovation survey and the industrial production survey that exporting leads to productivity improvements. These, however, are likely to be related to process rather than product innovations, and are observed only in a sample of medium and large first‐time exporters. This finding makes a case in favour of the learning‐by‐exporting hypothesis by demonstrating that these learning effects from exporting occur through the mechanism of process innovation enhancing firm technical efficiency.

Combining data on structural characteristics and economic performance for a large sample of Italian firms with data on exporting and importing activity, we uncover evidence supporting recent theories on firm heterogeneity and international trade, together with some new facts. In particular, we find that importing is associated with substantial firm heterogeneity. First, we document that trade is more concentrated than employment and sales, and show that importing is even more concentrated than exporting both within sectors and along the sector‐ and country‐extensive margins. Second, while supporting the fact that firms involved in both are the best performers, we also find that firms involved only in importing activities perform better than those involved only in exporting. Our evidence suggests there is a strong self‐selection effect in the case of importers and the performance premia of internationalised firms correlate relatively more with the degree of geographical and sectoral diversification of imports.