Exporting and the Firm’s Performance “Evidence from the Manufacturing firms in Iran” September 2018

Document Type : Research Paper


1 Assistant professor of Economics, Graduate School of Management and Economics, Sharif University of Technology

2 Graduate School of Management and Economics, Sharif University of Technology


In this paper, we investigate the relationship of the firms’ performance and their export status: 1) How are exporting firms different from home producers? 2) How does the performance of a firm evolve before starting to export? 3) After starting to export, how does the performance of a firm change? Using Iranian manufacturing plant level data, we find that Iranian exporters perform much better than non-exporters; on average they perform significantly better in sales by 34%, in value-added by 28%, in employment by 37%, in TFP by 25%, in labor productivity by 26% and in energy productivity by 24%. Iranian exporters grow faster in these measures than non-exporters before starting to export. But after starting to export, the size measures are still better than non-exporters while the growth measures are not significantly different from others. Finally, the exiters have severe significant decline in both level and growth measures.
JEL Classification: F10


Main Subjects

رحمتی، محمدحسین، و پیله‌وری، عسل (1393). تخمین بهره‌وری بخش صنعت ایران. پایان نامه کارشناسی ارشد. دانشگاه صنعتی شریف. دانشکده مدیریت و اقتصاد
Arkolakis, C. (2010). Market penetration costs and the new consumers margin in international trade. Journal of political economy, 118(6), 1151-1199.
Baldwin, R. (1989). Sunk-cost hysteresis.‏ NBER Working Paper No. 2911
Baldwin, R. E. (2000). Trade & growth: still disagreement about the relationships (No. 264). OECD Publishing.‏
Ben-David, D., & Loewy, M. B. (1998). Free trade, growth, & convergence. Journal of economic growth, 3(2), 143-170.‏
Bernard, A. B., & Bradford Jensen, J. (1999). Exceptional exporter, performance: cause, effect, or both? Journal of international economics, 47(1), 1-25.
Bernard, A. B., & Jensen, J. B. (1997). Why some firms export: Experience, entry costs, spillovers, & subsidies. Yale University. Photocopy.‏
Bernard, A. B., & Jensen, J. B. (1999). Exporting & productivity (No. w7135). National bureau of economic research.‏
Bernard, A. B., & Wagner, J. (1997). Exports & success in German manufacturing. Weltwirtschaftliches Archive, 133(1), 134-157.‏
Bernard, A. B., Jensen, J. B., & Lawrence, R. Z. (1995). Exporters, jobs, & wages in US manufacturing: 1976-1987. Brookings Papers on Economic Activity. Microeconomics, 67-119.‏
Bernard, Andrew B., Jonathan Eaton, J., Bradford, J., & Kortum, S. (2003). Plants and Productivity in International Trade..The American Economic Review 93 (4) (September 1): 1268.1290.
Caliendo, L., Monte, F., & Rossi-Hansberg, E. (2015). The anatomy of French production hierarchies. Journal of Political Economy, 123(4), 809-852.
Chaney,T., (2008). Distorted Gravity: The Intensive and Extensive Margins of International Trade..The American Economic Review 98 (4): 1707.1721.
Clerides, S. K., Lach, S., & Tybout, J. R. (1998). Is learning by exporting important? Micro-dynamic evidence from Colombia, Mexico, & Morocco. Quarterly journal of Economics, 903-947.‏
De Loecker, J. (2007). Do exports generate higher productivity? Evidence from Slovenia. Journal of International Economics, 73(1), 69-98.‏
Dixit, A. K., & Stiglitz, J. E. (1977). Monopolistic competition & optimum product diversity. The American Economic Review, 297-308.‏
Eaton, J., & Kortum, S. (2002). Technology, Geography, and Trade. Econometrica 70 (5): 1741.1779.
Eaton, J., Kortum, S., &  Kramarz, F. (2011). An Anatomy of International Trade: Evidence from French Firms. Econometrica 79 (5): 1453.1498.
Feeney, J. (1999). International risk sharing, learning by doing, & growth. Journal of Development Economics, 58(2), 297-318.‏
Gandolfo, G. (1998). International trade theory & policy. Berlin: Springer.‏
Giles, J. A., & Williams, C. L. (2000). Export-led growth: a survey of the empirical literature & some non-causality results. Part 2. Journal of International Trade & Economic Development, 9(4), 445-470.‏
Giles, J. A., & Williams, C. L. (2000). Export-led growth: a survey of the empirical literature & some non-causality results. Part 1. The Journal of International Trade & Economic Development, 9(3), 261-337.‏
Grossman, G. M. (Ed.). (1992). Imperfect competition & international trade. Mit Press.‏
Harrigan, J. (1994). Scale economies & the volume of trade. The Review of Economics & Statistics, 321-328.‏
Harrigan, J. (1996). Openness to Trade in Manufactures in the OECD. Journal of international economics, 40(1), 23-39.‏
Helpman, E. (1990). Monopolistic competition in trade theory (No. 16). International Economics Section, Department of Economics Princeton University.‏
Helpman, E., & Krugman, P. R. (1989). Trade policy & market structure. MIT press.‏
Krugman, P. R. (1980). Scale economies, product differentiation, & the pattern of trade. American Economic Review, 70, 950–959.
Krugman, P. R. (2009). International economics: Theory & policy, 8/E. Pearson Education India.‏
Levinsohn, J., & Petrin, A. (2003). Estimating Production Functions Using Inputs to Control for Unobservables. The Review of Economic Studies, 70(2), 317-341.
López, R. A. (2005). Trade & growth: Reconciling the macroeconomic & microeconomic evidence. Journal of Economic Surveys, 19(4), 623-648.‏
Lu, D. (2010). Exceptional exporter performance? Evidence from Chinese manufacturing firms. Manuscript, University of Chicago.‏
Markusen, J. R., Melvin, J. R., Kaempfer, W. H., & Maskus, K. E. (1995). International trade: Theory & evidence. New York: McGraw-Hill.
Melitz, M. J. (2003). The impact of trade on intra‐industry reallocations & aggregate industry productivity. Econometrica, 71(6), 1695-1725.‏
Olley, G. S., & Pakes, A. (1996). The dynamics of productivity in the telecommunications equipment industry. Econometrica, 64(6), l263-l297.‏
Roberts, M. J., & Tybout, J. R. (1997). The decision to export in Colombia: an empirical model of entry with sunk costs. The American Economic Review, 545-564.‏
Roberts, M., Sullivan, T., & Tybout, J. R. (1995). Micro-foundations of export booms. World Bank mimeo.‏
Spence, M. (1976). Product selection, fixed costs, & monopolistic competition. The Review of Economic Studies, 217-235.‏
Trade Promotion Coordinating Committee (1995). National Export Strategy. Third Annual Report to the United States Congress.
Wagner, Joachim. (1995). “Exports, Firm Size, and Firm Dynamics.” Small Business Economics 7, 29-39.
  • Receive Date: 13 February 2018
  • Revise Date: 26 October 2018
  • Accept Date: 06 November 2018
  • First Publish Date: 21 March 2019