Lejour, Arjan and Rojas Romasgosa, Hugo and Rodriguez, Victor and Montalvo, Carvos and Van der Zee, Frans (2009): Trade costs, Openness and Productivity: Market Access at Home and Abroad. Published in: Industrial Policy and Economic Reform Papers No. 10 (January 2009)
Download (232Kb) | Preview
This paper discusses the channels between openness and productivity and trade hampering factors. The stylized facts from the heterogeneous firms literature suggests that firms face market entry costs for each new product they export and to each new export market. Transport costs, border costs and retail and wholesale distribution costs might add up to 170% of the export value, but formal import tariffs and duties are relatively unimportant. The results by the Observatory of European SMEs survey, which has firm-level data for the whole European Union confirm this result. Lack of knowledge on export markets and regulations in other countries are important trade barriers for European firms. From these outcomes it could be derived that EU trade policies should be directed to deep integration with other countries, preferably by implementing internal market policies for goods and services trade and foreign direct investment. These policies can deal with reducing regulations heterogeneity, non-tariff barriers and customs procedures. Providing public information on export markets (e.g. customers, contact, and distribution networks) could also be helpful, if well targeted.
|Item Type:||MPRA Paper|
|Original Title:||Trade costs, Openness and Productivity: Market Access at Home and Abroad|
|Keywords:||Openness; productivity; heterogeneous firms; innovation; trade costs; trade policy|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||A.M. Lejour|
|Date Deposited:||09. Mar 2010 12:02|
|Last Modified:||12. Feb 2013 13:00|
Acharya, R. and Keller, W. (2007), Technology transfer through imports, NBER Working Paper 13086.
Aghion, P., and R. Griffith (2005), Competition and Growth: reconciling theory and evidence, MIT Press.
Aghion, P., N. Bloom, R. Blundell, R. Griffith and P. Howitt (2005), Competition and innovation – an inverted U relationship. Quarterly Journal of Economics, May 2005: 701-728.
Alvarez, R. (2004), Sources of export success in small and medium-sized enterprises: The impact of public programs, International Business Review, 13, 383-400.
Alvarez, R. (2007), Explaining export success: firm characteristics and spillover effects, World Development, 35, 377-393.
Anderson, J. E. and van Wincoop, E. (2004). .Trade Costs., Journal of Economic Literature 42(3): 691.751.
Anderton, B. (1999), Innovation, product quality, variety, and trade performance: an empirical analysis of Germany and the UK, Oxford Economic Papers, 51, 152-167.
Arnold, J. M. and K. Hussinger (2005), Export versus FDI in German manufacturing: firm performance and participation in international markets, Centre for European Economic Research, ZEW Discussion Papers 05-73.
Badinger, H. (2005), Growth Effects of Economic Integration: Evidence from the EU Member States (1950-2000), Review of World Economics vol. 141(1), p. 50-78.
Baldwin, R. (2000), Regulatory protectionism, developing nations and a two-tier world trade system, CEPR DP 2574.
Baldwin, J. and Gu, W. (2004), Trade Liberalization: Export-market Participation, Productivity Growth, and Innovation, Oxford Review Of Economic Policy, 20, 3, 372-392.
Bandick, R. (2004). Do Workers Benefit from Foreign Ownership? Evidence from Swedish manufacturing. FIEF Working Paper Series 2004, No 201.
Bandick, R. (2006), Multinationals and plant survival in Swedish manufacturing, Örebro University, available from http://www.etsg.org/ETSG2006/papers/bandick.pdf
Basile, R. (2001). Export behavior of Italian manufacturing firms over the nineties: the role of innovation. Research Policy 30(8), 1185–1201
Barrios, S., Bertinelli, L. and Strobl, E. (2007), Exploring the link between local and global knowledge spillovers, Knowledge for growth: Role and dynamics of corporate R&D, Seville.
Bellone, F., P. Musso, L. Nesta and M. Quéré (2006), the U-shaped productivity dynamics of French exporters, Working paper 2007-01, Università de Nice Sophia-Antipolis.
Bernard, A. B., Eaton, J., Jensen, J. B. and Kortum, S. (2003a), Plants and Productivity in International Trade., American Economic Review 93(September): 1268.1290.
Bernard, A. B. and Jensen, J. B. (1995), Exporters, Jobs, and Wages in US Manufacturing: 1976-87, Brookings Papers on Economic Activity: Microeconomics, pp. 67-119.
Bernard, A.B. and J.B Jensen (1999), Exceptional exporter performance: cause, effect, or both? Journal of International Economics, 47, pp. 1-27
Bernard, A. B. and Jensen, J. B. (2004), Why Some Firms Export, Review of Economics and Statistics 86(2): 561-569.
Bernard, A. B., Jensen, J. B. and Schott, P. K. (2003b), Falling Trade Costs, Heterogeneous Firms and Industry Dynamics, Working Paper 9639, National Bureau of Economic Research.
Bernard, A. B., Jensen, J. B. and P. K. Schott (2005), Importers, exporters, and multinationals: a portrait of firms in the US that trade goods., NBER Working Paper 11404, National Bureau of Economic Research.
Biatour, B. and Kegels, C. (2007), R&D and the multifactor productivity growth: The role of externalities in a small European open economy, Knowledge for growth: Role and dynamics of corporate R&D, Seville.
Bigsten, A., Collier, P., Dercon, S., Fafchamps, M., Gauthier, B., Gunning, J., Habarurema, J., Oostendorp, R., Pattillo, C., Soderbom, M. Teal, F. and Zeufack, A. (2000), Exports and firm-level efficiency in African manufacturing. Working Paper Series, 2000-16, Centre for the Study of African Economies.
Cassiman, B. and Veugelers, R. (2004), Importance of international linkages for local know-how flows: Some econometric evidence from Belgium, European Economic Review, 48, 2, 455476.
Caves, R.E. (1996), Multinational enterprise and economic analysis, Second Edition, Cambridge University Press, Cambridge.
Cieślik, A. and M. Ryan (2004), Firm heterogeneity, foreign market entry mode and ownership choice: the case of Japanese direct investment, available at http://www.etsg.org/ETSG2007/papers/cieslik.pdf.
Coe, D.T., and H. Helpman, international R&D spillovers, European Economic Review Volume 39, Issue 5, May 1995, Pages 859-887
Coe, D., Helpman, E. and Hoffmaister, A. (1997), North-south R&D spillovers, Economic Journal, 107, 134-149.
Corcos, G., Del Gatto, M. D., Mion, G. and Ottaviano, G. I. (2007), Productivity and Firm Selection: Intra- vs International Trade, Working Paper, CRENoS, University of Cagliari and Sassari, Sardinia.
CPB/SCP (2008) The New neighbours, European Outlook 6, the Hague.
CSES, (2001), Barriers to international trade in business services - final report, study commissioned by the European Union, CSES/ European Commission, Brussels.
Crespi, G., Criscuolo, C., Haskel, J. and Slaughter, M. (2008), Productivity growth, knowledge flows, and spillovers. NBER Working Paper, 13959.
Crespo, J., Martín, C. and Velázquez, F. (2004), The role of international technology spillovers in the economic growth of the OECD countries, Global Economy Journal, 4, 1-18.
Damijan, J. P., Polanec, S. and J. Prasnikar (2004), Self-selection, export market heterogeneity and productivity improvements: firm level evidence from Slovenia, discussion paper 148/2004, LICOS Centre for Transition Economies, Katholieke Universiteit Leuven.
De Loecker, J. (2007), Do exports generate higher productivity? Evidence from Slovenia, Journal of International Economics 73, 69–98.
Del Barrio-Castro, T., López-Bazo, E. and Serrano-Domingo, G. (2002), New evidence on international R&D spillovers, human capital and productivity in the OECD, Economics Letters, 77, 41-45.
Del Gatto, M., Mion, G. and Ottaviano, G. I. P. (2006), Trade Integration, Firm Selection and the Costs of Non-Europe”, CEPR Discussion Paper No. 5730.
Eaton, J., Kortum, S. and Kramarz, F. (2004), .Dissecting Trade: Firms, Industries, and Export Destinations., American Economic Review 94(2): 150.154.
Eaton, J., S. Kortum and F. Kramarz (2007), An anatomy of international trade: evidence from French firms, working paper.
Edwards, S. (1998), Openness, productivity and growth: what do we really know?, The Economic Journal 108 (March), p. 383-398.
Engelbrecht, H. (1997), International R&D spillovers, human capital and productivity in the OECD economies: An empirical investigation, European Economic Review, 41, 1479-1488.
Feenstra, R.C. (2004), Advanced International Trade: theory and evidence, Princeton University Press.
Frankel, J. and A. Rose (2002), An Estimate of the Effect of Common Currencies on Trade and Income, Quarterly Journal of Economics 117(2), p. 437-66.
Frankel, J. A. and D. Romer (1999), Does Trade Cause Growth, American Economic Review 89(3), p. 379-399.
Frantzen, D. (2002), Intersectoral and international R&D knowledge spillovers and total factor productivity, Scottish Journal of Political Economy, 49, 3, 280-303.
Gallup Organization , 2007, Observatory of European SMEs, Flash Eurobarometer Series no. 196.
Ginarte, J. and Park, W. (1997), Determinants of patent rights: A cross-national study, Research Policy, 26, 3, 283-301.
Girma, S., R. Kneller and M. Pisu, 2005, Export versus FDI: an empirical test, Weltwirtschaftliches Archiv, 12, pp. 855-66
Girma, S., Kneller, R. and M. Pisu, 2007, Do exporters have anything to learn from foreign multinationals? European Economic Review, vol. 51, page 981-998.
Gleeson and Ruane (2007), Irish manufacturing export dynamics: evidence of exporter heterogeneity in boom and slump periods, Review of World Economics, 143, 2, 355-388.
Görg, H., Henry, M. and Strobl, E. (2008), Grant support and exporting activity: Evidence from Irish manufacturing, Review of Economics and Statistics, 90, 1, 168-174.
Greenaway, D. and Kneller, R. (2007), Firm heterogeneity, exporting and foreign direct investment, Economic Journal, 117, 517, F134-F161.
Guellec, D. and van Pottelsberghe, B. (2001a), R&D and productivity growth: Panel data analysis of 16 OECD countries, OECD Science, Technology and Industry Working Papers, 3.
Guellec, D. and van Pottelsberghe, B. (2001b), The internationalization of technology analysis with patent data, Research Policy, 30, 1253-1266.
Guellec, D. and van Pottelsberghe, B. (2004), From R&D to productivity growth: Do institutional setting and the source of funds of R&D matter?, Oxford Bulletin of Economics and Statistics, 66, 353-378.
Hansson, P. and N. Nan Lundin (2004), Exports as an indicator on or promoter of successful Swedish manufacturing firms in the 1990s. Review of World Economics, 140, 3, 415–45, 2004.
Hamilton, D. and J.P. Quinlan (2007), Sleeping giant; awakening the transatlantic services economy, center for transatlantic relations.
Harris, R. I. D. and Q. Li (2007), Firm level empirical study of the contribution of exporting to UK productivity growth. Report to UK trade and investment, available at http://www.uktradeinvest.gov.uk/UKTI/fileDownload/FAMEFinalReport2007v2.pdf?cid=401169
Helpman, E., M. Melitz and S. Yeaple (2004), Export versus FDI with heterogeneous firms, American Economic Review, 94(1), pp. 300-316.
Helpman,E., M. Melitz and Y. Rubinstein (2007), Trading partners and trading volumes, NBER Working Paper 12927. International Study Group on Exports and Productivity (2007). Exports and Productivity – Comparable Evidence for 14 Countries, ZEW Discussion Paper 07-069, ZEW Centre for European Economic Research.
Irwin, D. and Tervio, M. (2002), Does trade raise income?: Evidence from the twentieth century, Journal of International Economics, 58, 1-18.
Kao, C., Chiang, M. and Chen B; (1999), International R&D spillovers: an application of estimation and inference in panel cointegration, Oxford Bulletin of Economics and Statistics, 61, s1, 691-709.
Keller, W. (1998), Are international R&D spillovers trade-related? Analyzing spillovers among randomly matched trade partners, European Economic Review, 42, 1469-1481.
Keller, W. (2002), Trade and the transmission of technology, Journal of Economic Growth, 7, 5-24.
Keller, W. (2004), International technology diffusion, Journal of Economic Literature, XLII, 752-782.
Kneller, R. and Pisu, M. (2007), Export Barriers: What Are They and Who Do They Matter To?, Research Paper 2007/12, University of Nottingham.
Kneller, R., Pisu, M. and Yu, Z. (2008), Overseas Trading Costs and Firm Export Performance, Canadian Journal of Economics 41(2): 639-669.
Kox, H. and A. Lejour (2005), Regulatory heterogeneity als obstacle for international services trade, Discussion Paper 49, CPB, The Hague.
Kraay, A. (1999), Exportations et performances économiques: Etude d’un panel d’entreprises chinoises. Revue d’Economie du Développement 0, 183-207.
Lelarge, C. and Nefussi, B. (2007), Exposure to Low-wage competition, activity changes and quality upgrading: An empirical assessment, Knowledge for growth: Role and dynamics of corporate R&D, Seville.
Levine, R., and D. Renelt (1992), A sensitivity analysis of cross-country growth, American Economic Review 82, 942-963.
Lewer, J., and H. Van den Berg, (2003), How large is international’s trade effect on economic growth? Journal of Economic Surveys 17(3), p. 363-396.
Lichtenberg, F. and van Pottelsberghe, B. (1998), International R&D spillovers: A comment, European Economic Review, 42, 1483-1491.
Lopez R.A., 2005, Trade and growth: reconciling the macroeconomic and microeconomic evidence, journal of Economic surveys 19(4), p. 623-648.
Lumenga-Neso, O., Olarreaga, M. and Schiff, M. (2005), On ‘indirect’ trade-related R&D spillovers, European Economic Review, 49, 1785-1798.
Maican, F. (2007), Productivity dynamics, R&D, and competitive pressure, Knowledge for growth: Role and dynamics of corporate R&D, Seville.
Markusen J. (2002), Multinational Firms and the Theory of International Trade, MIT Press, Cambridge (Mass.).
Maskus, K. (2000), Intellectual property rights in the global economy, Institute for International Economics, Washington, DC.
Maskus, K. and Penubarti, M. (1995), How trade-related are intellectual property rights?, Journal of International Economics, 39, 227-248.
Mayer, T. and G. Ottaviano (2007), The Happy Few. the internationalisation of European Firms Bruegel blueprint series Vol III. Brussels.
Melitz, M.J. (2003), The impact of trade on intra-industry reallocations and aggregate industry productivity, Econometrica, 71(6), pp. 1695-1725.
Melitz, M. J. and Ottaviano, G. I. P. (2008). .Market Size, Trade, and Productivity., Review of Economic Studies 75(1): 295.316.
Muûls, M. and M. Pisu (2007), Imports and exports at the level of the firm: evidence from Belgium, CEP Discussion Papers dp0801, Centre for Economic Performance, LSE
Nordas, H., Miroudot, S and Kowalski, P. (2006), Dynamic gains from trade, OECD Trade Policy Working Paper 43.
OECD (2007), Staying competitive in the global economy: Moving up the value chain, OECD, Paris.
Papaconstatntinou, G., Sakurai, N., Wycoff, A., Fagerberg, J. and Ioannidis, E. (1995), Technology diffusion and international competitiveness, Report for DG 13, European Commission, Brussels.
Rodriguez, V. (2003), Stimuli to adopt and enforce patent systems in Argentina and Canada in the multilateral trade framework, Journal of World Intellectual Property, 6, 3, 507-523.
Rodriguez, V., C. Montalvo, and . van der Zee (2008), On productivity and openness: innovation and knowledge spillovers as transmission channels, background report for Competitiveness report 2008.
Rodriguez, F. and Rodrik, D. (2001), Trade policy and economic growth: A skeptic’s guide to the cross-national evidence, in B. Bernanke and K. Rogoff (Eds.), NBER Macroeconomics Annual 2000, MIT Press, Cambridge, MA.
Rojas-Romagosa, H. (2008), Trade barriers and productivity: Empirical evidence from firm-level data, mimeo.
Serti, F., Tomasi, C. and A. Zanfei (2007), Exporters, importers and two-way traders: the links between internationalization, skills and wages. Working Papers 0713, University of Urbino Carlo Bo, Department of Economics, revised Oct 2007.
Serti F. and C. Tomasi (2007), Self selection and post-entry effects of exports, evidence from Italian manufacturing firms, available from http://www.freit.org/EITI/2008/SubmittedPapers/94Chiara_Tomasi.pdf
Sieber, S. and M. Silva Porto (2007), Chapter 10 Openness and barriers to trade, mimeo.
Smith, P. (1999), Are weak patent rights a barrier to US exports?, Journal of International Economics, 48, 151-177.
Tybout, J., De Melo and Corbo (1991), The effects of trade reforms on scale and technical efficiency, Journal of International Economics 31(3-4).
Tybout, J. (2001), Plant- and firm-level evidence on “new” trade theories, NBER Working Paper 8418.
van Pottelsberghe, B. and Lichtenberg, F. (2001), Does investment transfer technology across borders?, Review of Economics and Statistics, 83, 490-497.
Wacziarg, R. and K. Horn Welch (2003), Trade liberalisation and growth, NBER working paper 10152.
Wagner, J. (2007), Exports and productivity: A survey of the evidence from firm-level data, World Economy 30(1): 60-82.
Wakelin K. (1998), The role of innovation in bilateral OECD trade performance, Applied Economics, 30, 10, 1335-1346.
World Bank, 2006, Exporter promotion agencies; what works and what does not, Trade Note 30, Washington.
WTO (2007), World Trade Report 2007, Geneva.
Yang, G. and Maskus, K. (2001), Intellectual property rights and licensing: An econometric investigation, Review of World Economics, 137, 1, 58-79.
Yeaple, S. (2005), Firm heterogeneity, international trade and wages, Journal of international Economics 65: 1-20.