[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/usi/wpaper/837.html
   My bibliography  Save this paper

Is the productivity premium of internationalized firms technology-driven?

Author

Listed:
  • Michele Battisti
  • Filippo Belloc
  • Massimo Del Gatto
Abstract
We ask whether the productivity advantage of internationalized firms documented by the international trade literature can be interpreted most accurately in terms of proximity to the “technological frontier". We answer in the affermative using a methodology (based on mixture models) of unbundling technology and total factor productivity (TFP) by estimating “technology-specic" production function parameters. Exploiting detailed data provided by the EFIGE database (a sample of firms distributed across Austria, France, Germany, Hungary, Italy, Spain, and the United Kingdom), we nd technology gaps (with respect to the frontier) more than three times larger than the TFP gaps on average. We also nd sizable technology advantages for firms undertaking foreign direct investment and/or exporting to other European Union countries or to China, for importers of materials, and for firms with competitors in China and the United States. Medium and large firms feature a higher technology premium, which is even higher for firms operating in country-sectors that are more exposed to import competition from China. Younger firms use better technologies but less effectively.

Suggested Citation

  • Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2020. "Is the productivity premium of internationalized firms technology-driven?," Department of Economics University of Siena 837, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:837
    as

    Download full text from publisher

    File URL: http://repec.deps.unisi.it/quaderni/837.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jesse Perla & Christopher Tonetti & Michael E. Waugh, 2021. "Equilibrium Technology Diffusion, Trade, and Growth," American Economic Review, American Economic Association, vol. 111(1), pages 73-128, January.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Nina Pavcnik, 2002. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 245-276.
    4. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 903-947.
    5. Da-Rocha, José-María & Restuccia, Diego & Tavares, Marina M., 2023. "Policy distortions and aggregate productivity with endogenous establishment-level productivity," European Economic Review, Elsevier, vol. 155(C).
    6. Jess Benhabib & Jesse Perla & Christopher Tonetti, 2021. "Reconciling Models of Diffusion and Innovation: A Theory of the Productivity Distribution and Technology Frontier," Econometrica, Econometric Society, vol. 89(5), pages 2261-2301, September.
    7. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    8. Amit Gandhi & Salvador Navarro & David A. Rivers, 2020. "On the Identification of Gross Output Production Functions," Journal of Political Economy, University of Chicago Press, vol. 128(8), pages 2973-3016.
    9. Alain Gabler & Markus Poschke, 2013. "Experimentation by Firms, Distortions, and Aggregate Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 26-38, January.
    10. Diego Comin & Martí Mestieri, 2018. "If Technology Has Arrived Everywhere, Why Has Income Diverged?," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 137-178, July.
    11. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    12. Jesse Perla & Christopher Tonetti, 2014. "Equilibrium Imitation and Growth," Journal of Political Economy, University of Chicago Press, vol. 122(1), pages 52-76.
    13. Bernard, Andrew B & Jones, Charles I, 1996. "Technology and Convergence," Economic Journal, Royal Economic Society, vol. 106(437), pages 1037-1044, July.
    14. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    15. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Segundo Camino‐Mogro & Paul Carrillo‐Maldonado, 2023. "Do imports of intermediate inputs generate higher productivity? Evidence from Ecuadorian manufacturing firms," The World Economy, Wiley Blackwell, vol. 46(5), pages 1471-1521, May.
    2. Subal C. Kumbhakarⓡ & Emir Malikovⓡ & Christopher F. Parmeterⓡ, 2021. "Applications of efficiency and productivity analysis: editors’ introduction," Empirical Economics, Springer, vol. 60(6), pages 2657-2663, June.
    3. Kox, Henk L.M., 2022. "Revisiting the knowledge-capital model of foreign direct investment: New multi-country evidence," MPRA Paper 114559, University Library of Munich, Germany, revised 14 Sep 2022.
    4. Kox, Henk L.M., 2023. "Testing an extended knowledge-capital model of foreign direct investment," MPRA Paper 117266, University Library of Munich, Germany.
    5. Cheratian, Iman & Goltabar, Saleh & Gholipour, Hassan F. & Farzanegan, Mohammad Reza, 2024. "Finance and sales growth at the firms level in Iran: Does type of spending matter?," Research in International Business and Finance, Elsevier, vol. 67(PB).
    6. Kox, Henk L.M., 2022. "Linking the knowledge-capital model of foreign direct investment with national knowledge systems," EconStor Preprints 266495, ZBW - Leibniz Information Centre for Economics.
    7. Kox, Henk L.M., 2022. "Testing the knowledge-capital model of foreign direct investment: New evidence," MPRA Paper 114177, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2020. "Labor Productivity and Firm-Level TFP with Technology-Specific Production Function," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 35, pages 283-300, January.
    2. Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2020. "Labor Productivity and Firm-Level TFP with Technology-Specific Production Function," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 35, pages 283-300, January.
    3. M. Battisti & F. Belloc & M. Del Gatto, 2017. "Technology-specific Production Functions," Working Paper CRENoS 201709, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Jingfang Zhang & Emir Malikov, 2023. "Detecting Learning by Exporting and from Exporters," Journal of Productivity Analysis, Springer, vol. 60(1), pages 1-19, August.
    5. Kishi, Keiichi & Okada, Keisuke, 2018. "Trade Liberalization, Technology Diffusion, and Productivity," MPRA Paper 88597, University Library of Munich, Germany.
    6. Jamil, Nida & Chaudhry, Theresa Thompson & Chaudhry, Azam, 2022. "Trading textiles along the new silk route: The impact on Pakistani firms of gaining market access to China," Journal of Development Economics, Elsevier, vol. 158(C).
    7. Gregory Corcos & Massimo Del Gatto & Giordano Mion & Gianmarco I.P. Ottaviano, 2012. "Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade," Economic Journal, Royal Economic Society, vol. 122(561), pages 754-798, June.
    8. Bresnahan, Lauren & Coxhead, Ian & Foltz, Jeremy & Mogues, Tewodaj, 2016. "Does Freer Trade Really Lead to Productivity Growth? Evidence from Africa," World Development, Elsevier, vol. 86(C), pages 18-29.
    9. Dai, Mi & Maitra, Madhura & Yu, Miaojie, 2016. "Unexceptional exporter performance in China? The role of processing trade," Journal of Development Economics, Elsevier, vol. 121(C), pages 177-189.
    10. Maria Bas & Vanessa Strauss-Kahn, 2014. "Does importing more inputs raise exports? Firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 241-275, May.
    11. Massimo Del Gatto & Adriana Di Liberto & Carmelo Petraglia, 2011. "Measuring Productivity," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 952-1008, December.
    12. Crinò, Rosario & Bonfiglioli, Alessandra & Gancia, Gino, 2021. "International Trade with Heterogeneous Firms: Theory and Evidence," CEPR Discussion Papers 16249, C.E.P.R. Discussion Papers.
    13. Alvaro Garcia-Marin & Nico Voigtländer, 2019. "Exporting and Plant-Level Efficiency Gains: It's in the Measure," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1777-1825.
    14. Giammario Impullitti & Omar Licandro, 2018. "Trade, Firm Selection and Innovation: The Competition Channel," Economic Journal, Royal Economic Society, vol. 128(608), pages 189-229, February.
    15. Nelson Lind & Natalia Ramondo, 2018. "Innovation, Knowledge Diffusion, and Globalization," NBER Working Papers 25071, National Bureau of Economic Research, Inc.
    16. Ines Buono, 2009. "Firm heterogeneity and comparative advantage: the response of French firms to Turkey's entry in the European Customs Union," Temi di discussione (Economic working papers) 715, Bank of Italy, Economic Research and International Relations Area.
    17. Narjoko, Dionisius & Urata, Shujiro, 2019. "Firm Adjustment to Trade Policy Changes in East Asia," ADBI Working Papers 945, Asian Development Bank Institute.
    18. Kishi, Keiichi & Okada, Keisuke, 2021. "The impact of trade liberalization on productivity distribution under the presence of technology diffusion and innovation," Journal of International Economics, Elsevier, vol. 128(C).
    19. Rodríguez-Castelán, Carlos & López-Calva, Luis Felipe & Barriga-Cabanillas, Oscar, 2023. "Market concentration, trade exposure, and firm productivity in developing countries: Evidence from Mexico," World Development, Elsevier, vol. 165(C).
    20. Massimo Del Gatto & Gianmarco I. P. Ottaviano & Marcello Pagnini, 2008. "Openness To Trade And Industry Cost Dispersion: Evidence From A Panel Of Italian Firms," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 97-129, February.

    More about this item

    Keywords

    heterogenous firm; productivity premium; selection effect; technology; TFP; trade model;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usi:wpaper:837. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fabrizio Becatti (email available below). General contact details of provider: https://edirc.repec.org/data/desieit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.