The Role of Comparative Productivity Accounting in Export Decisions

This paper explores the importance of comparative productivity accounting and productivity-based analysis in export decisions at the firm level. The structure of the relationships between productivity ratios, input prices, scale effects, demand patterns, and exchange rates is developed within the context of a simple macroeconomic model. This framework is extended to encompass comparative productivity and cost analysis across international markets, and to derive conditions for export profitability under different market structures. Subsequently, the role of relative productivities in relation to other market and monetary variables is explored in detail using retrospective case study illustrations. Finally, the managerial implications of a productivity-based approach to export decisions are discussed.© 1984 JIBS. Journal of International Business Studies (1984) 15, 105–118