Export Behavior and Firm Productivity in German Manufacturing: A Firm-Level Analysis

Abstract: This paper examines the causal relationship between productivity and exporting in German manufacturing. We find a causal link from high productivity to presence in foreign markets, as postulated by a recent literature on interna-tional trade with heterogeneous firms. We apply a matching technique in order to analyze whether the presence in international markets enables firms to achieve further productivity improvements, without finding significant evidence for this. We conclude that high-productivity firms self-select themselves into export mar-kets, while exporting itself does not play a significant role for the productivity o