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YES, DEK Comments by John Earle June 2010

“Exports and Productivity Link in Manufacturing: Microeconomic Evidence from Croatia” by Gorana Lukinic Cardic. YES, DEK Comments by John Earle June 2010. What’s the Question?. Two big topics: Recent literature on firm-level relationship of exports and productivity

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YES, DEK Comments by John Earle June 2010

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  1. “Exports and Productivity Link in Manufacturing: Microeconomic Evidence from Croatia”by Gorana Lukinic Cardic YES, DEK Comments by John Earle June 2010

  2. What’s the Question? Two big topics: • Recent literature on firm-level relationship of exports and productivity • Selection, learning – most studies find former • Theories – firm dynamics extended to X • Croatia’s export performance (aggregate) • Level, growth (low) • Products, destinations (hand-wringing) • Can these be connected? • Specialness of Croatia (for research) -> lessons • Could theory be more useful?

  3. What’s the method? • Int. description of level & composition of HR X • little used, but relevant for selection and learning? • Firm-level data (brava!): manufacturing, 2002-7 • Productivity regressions with pre/post comparisons • Depvar: labor productivity (could be extended) • Var of interest: X dummy (EDUM) – contemporaneous in panel regressions (but attention to dynamics) • Year and industry controls, but drop from most results with FE& 2-year samples, no industry shocks • Size control, but endogenous? • Different samples for different questions

  4. How are estimates identified? • Short time series -> lengthen • Xer premium – pooled panel • OLS: 14% , but just descriptive • FE: only 4%, identified from switchers • Focus on entrants (new Xers) relative to non-Xers • Selection – 2-year pre-entrant samples • FE or group effect? Otherwise, not DiD. • Estimates never significant • Learning – mostly 2-year post-entry samples • FE?

  5. Are the estimates credible? • Puzzling variation in Xerpremia • Only small Xers & new entrants are more productive • Sample size variation (Table 9: latter/former = 2) • Switchers • How stable is X behavior? Not very (check volume) • Selection estimates on entrants very wobbly • 2-year post-samples show counter-intuitive trend • Small samples -> pool years and samples (Table 14 most credible – learn less from the rest) • Need narrower control group for entrants • Xers and non-Xers very different -> matching

  6. How could theory be more useful? • Guide to empirical design, interpretation of results • Descendant from models of industry dynamics • Fixed cost of entry (Jovanovic, Hopenhayn) • Fixed cost of operating (salvage value) • Experimentation (including mistakes) • Entrants (Melitz: exporting) • Incumbents (Ericson-Pakes) – intensive margin more impt? • Empirical regularities (“stylized facts”) could guide further theoretical development

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