Learning-by-Exporting? Firm-Level Evidence for UK Manufacturing and Services Sectors



generate first-stage predicted values of the probability of exporting, with the second
stage estimation of Equation (5) including the sample selectivity correction terms
from the first-stage model. That is, if
Pit is the predicted propensity score of exporting
for firm
i at time t (cf. Equation 3), then the inverse Mills ratios (or selectivity terms)
from this model are give by:

ʌ ʌ

λ0it = —Ф(P^ )    if Export = 0;    λ1it = φ(^it )    if Export = 1          (6)

1- Φ( P^t )                             Φ( P^t )

These selectivity terms ( λ0 and λ1 ) enter Equation (5) to control directly for the
correlation of the error term in the model determining TFP with the error term in the
model determining whether the firm exports or not.

Several authors (Puhani, 2000; Smith, 2004; Angrist and Krueger, 2001) point out the
problems associated with the Heckman approach, such as the need for exclusion
restrictions otherwise the model may only be identified through the nonlinearity of the
selectivity parameter included in the second stage equation. In summary, we choose to
test for the relationship between exporting and productivity using all three approaches,
viz. an IV approach, a control function approach, and a matching approach.

V. Empirical Modelling and Results

To examine the self-selection hypothesis, we estimate Equation (3) using weighted

FAME data, in a probit model to determine which firms exported at any time during
1996-2004. Because of space constraints, the results for 16 industry sub-groups are
not reported here but are available from the authors.
28 Our estimation results show

that larger firms are much more likely to engage in exporting; and firms with higher

28


See http://www.gla.ac.uk/departments/economics/staff/pdfs/Table S1 .pdf

20



More intriguing information

1. Better policy analysis with better data. Constructing a Social Accounting Matrix from the European System of National Accounts.
2. Dual Track Reforms: With and Without Losers
3. Design and investigation of scalable multicast recursive protocols for wired and wireless ad hoc networks
4. The name is absent
5. The name is absent
6. The name is absent
7. The name is absent
8. Novelty and Reinforcement Learning in the Value System of Developmental Robots
9. The Advantage of Cooperatives under Asymmetric Cost Information
10. Revisiting The Bell Curve Debate Regarding the Effects of Cognitive Ability on Wages
11. The name is absent
12. Do the Largest Firms Grow the Fastest? The Case of U.S. Dairies
13. Ruptures in the probability scale. Calculation of ruptures’ values
14. The name is absent
15. Emissions Trading, Electricity Industry Restructuring and Investment in Pollution Abatement
16. THE ECONOMICS OF COMPETITION IN HEALTH INSURANCE- THE IRISH CASE STUDY.
17. Detecting Multiple Breaks in Financial Market Volatility Dynamics
18. The name is absent
19. PERFORMANCE PREMISES FOR HUMAN RESOURCES FROM PUBLIC HEALTH ORGANIZATIONS IN ROMANIA
20. BILL 187 - THE AGRICULTURAL EMPLOYEES PROTECTION ACT: A SPECIAL REPORT