International Trade and Revenue-Based Total Factor Productivity: A Firm-Level Analysis

Economists concur that international trade is conducive to economic growth. However, at the firm level, variation exists. In this article, my goal is to conduct economic analysis on firm- level data and study the productivity effects of trade. With the comprehensive World Bank Enterprise Surveys data, I first explore trade patterns across different firms, controlling for industry, firm size, and the legal status of the firm. I then conduct regression analysis to identify characteristics of firms that participate in trade. Finally, I use an instrumental variable regression to study the causal relationship between a firm’s productivity and its participation in trade