INTERNATIONAL TRADE AND FIRM PRODUCTIVITY WITHIN THE ITALIAN MANUFACTURING SECTOR: Self-Selection or Learning-by-Exporting?

The ongoing process of international economic integration has induced several academic researchers and policy makers to deepen increasingly issues about the relationship between international trade and economic growth. More in particular, the attention is increasingly focusing on the link between exporting and firm performance, acknowledging the extreme relevance of 'firm heterogeneity'. This paper investigates empirically the exporting-productivity linkage in the Italian manufacturing sector, following a brief overview of recent literature. By using firm-level panel data for the years 2000 and 2003, we find that exporters are more productive than non-exporters and this productivity gap could be due to the self-selection mechanism – solely the high-performance firms are able to serve foreign markets – rather than post-entry effects.