Seminario de microeconomía aplicada 16: Export Market Orientation and Firm Productivity

We analyze detailed trade data to assess the degree of foreign-market orientation of Colombian manufacturing firms, and its relationship with total factor productivity. We measure export-market orientation in several ways. First, we establish that exporting firms have a (robust) productivity premium over nonexporters. We then look at the degree of export intensity, defined as the ratio of export sales to total sales, and find a positive association with firm productivity levels. However, once we focus just on exporting firms this effect disappears. We also find that the number of products exported and the number of markets reached are associated with higher productivity levels, a relationship that also holds across exporting firms alone. Finally, we also explore if there is any specific order in the way firms export a given product or to a given country and, contrary to standard theory, we find no evidence of hierarchies in exporting.