Zealand

Self-selection of productive firms to exporting suggests that non-exporters are less productive and locked out of international markets due to low productivity. Using a panel dataset of 88,752 New Zealand agriculture and forestry sector firms over the period 2000-07, this paper measures the productivity of exporters and non-exporters separately. The paper finds that exporters are, on average, twice as productive as non-exporters. Across both exporters and non-exporters, we report a mixed rate of productivity growth: negative until the median and positive beyond. Exporters record a higher negative growth rate relative to non-exporters (below the median) and also a higher positive growth rate (beyond the median). Analysis of the productivity distribution in quantiles suggests that the sub-set of non-exporters who have productivity levels similar to that of exporters is large. For this sub-set of firms, it would be erroneous to conclude that the export propensity decision is determined by low productivity. This paper is partly derived from a research report written by the first author for the Ministry of Agriculture and Forestry (MAF), New Zealand (NZ). Funding from MAF is acknowledged as are constructive suggestions to improve the paper. Thanks are due to an anonymous referee who made several comments to improve the paper. The authors thank K.K. Tang for reviewing the paper. Disclaimer: The opinions, findings, recommendations and conclusions expressed in this report are those of the authors. Statistics New Zealand (NZ), the Ministry of Economic Development, NZ and the Ministry of Agriculture and Forestry, NZ take no responsibility for any omissions or errors in the informatio