Productivity and Trade Orientation in UK Manufacturing

M.I. Rizov, P. Walsh

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

Abstract

We show that improvements in aggregate productivity in UK manufacturing during the first years after the implementation of the Euro, by the UK's main trading partners in Europe, are determined by both market share reallocation and within-company productivity growth. Furthermore, we outline a structural methodology for estimating parameters of a production function linking the unobservable productivity to endogenous company-level trade orientation, investment and exit decisions. This allows us to back out consistent and unbiased estimates of productivity dynamics by trade orientation of companies within four-digit UK manufacturing industries using FAME data over the period 1994–2001. Our estimates of productivity dynamics indicate that improvements in aggregate productivity were mainly driven by market share reallocations away from inefficient and towards efficient exporting companies alongside productivity improvements within non-exporting companies
Original languageEnglish
Pages (from-to)821-849
JournalOxford Bulletin of Economics and Statistics
Volume71
Issue number6
DOIs
Publication statusPublished - 2009

Keywords

  • export
  • entry
  • firms
  • exit
  • liberalization
  • colombia
  • dynamics
  • inputs
  • plants
  • costs

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