"The Relationship between Exports and Productivity at the Plant level in the Turkish Apparel and Motor Vehicle Parts Industries

Mahmut Yasar & Carl H. Nelson

No 138, Econometric Society 2004 North American Summer Meetings from Econometric Society

Abstract: We investigate the relationship between exports and productivity in the Turkish apparel and motor vehicle and parts industries from 1990-1996, using two different models for plant-level panel data. In the first model, we examine the effect of past export status on current productivity both with and without controlling for the export history of plants. Our results show that the plants' prior market experience is a factor in their current productivity. The learning effects are evident among continuing exporters and entrants. This model, however, neither controls for the endogeneity of the explanatory variables nor for the unobserved plant-specific effects that persist over time. Moreover, it does not distinguish between the long- and short-run relationships between exports and productivity. Thus, a second model, an Error- Correction specification for panel data, is estimated to address these three issues. Our findings suggest that there is a bidirectional relationship between exports and productivity both in the short- and long-run. The effect of productivity on exporting is much stronger than the effect of exporting on productivity, suggesting that more productive firms enter the export market, then they experience a productivity enhancement due to their participation in the export market

Keywords: Productivity; Multilateral Index; Exports; Causality; Error-Correction Model; Dynamic Panel Data Estimator; System GMM. (search for similar items in EconPapers)
JEL-codes: C33 D24 F14 O47 (search for similar items in EconPapers)
Date: 2004-08-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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