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Exports and Firm Productivity in Turkish Manufacturing: An Olley-Pakes Estimation

Author

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  • M. Akif Arvas

    (Department of Economics, Y z nc Y l University, Van, Turkey.)

  • Burak Uyar

    (Department of Econometrics, Y z nc Y l University, Van, Turkey.)

Abstract

In this study, we examine the effects of exporting on the industry productivity following a two-step procedure using 4-digits industry level data of Turkish manufacturing sectors for the period 2003-2008. First, robust total factor productivity variable is obtained from a Cobb-Douglas production function following the semiparametric method of Olley and Pakes (1996), since productivity estimation by approximating the weighted sum of the inputs by OLS may suffer from simultaneity and selection biases. In the second stage of empirical analysis, the relationship between productivity and being net-exporter is estimated by fixed-effects panel data method. Results show that, productivity level for net-exporters is lesser than the level for net-importers indicating that industries are more prone to import and more competitive on import markets. We also show that when simultaneity and selection biases are not controlled for, the coefficient for the labor input is biased upward and the coefficient for the capital stock is biased downward

Suggested Citation

  • M. Akif Arvas & Burak Uyar, 2014. "Exports and Firm Productivity in Turkish Manufacturing: An Olley-Pakes Estimation," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 243-257.
    • Handle: RePEc:eco:journ1:2014-02-2
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    References listed on IDEAS

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    1. Aguirregabiria, Victor, 2009. "Econometric Issues and Methods in the Estimation of Production Functions," MPRA Paper 15973, University Library of Munich, Germany.
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    Cited by:

    1. Ana Martins & Tiago Domingues & Catarina Branco, 2018. "The Determinants of TFP Growth in the Portuguese Service Sector," GEE Papers 0114, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2018.
    2. Muhammad Zeeshan Younas, 2022. "A Spatial Agglomeration Analysis of Firm Productivity: A Case of the Textile Sector of Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 27(1), pages 20-67, Jan-June.
    3. Paulo Matos & Pedro Neves, 2020. "The Determinants of Total Factor Productivity in the Portuguese Quaternary Sector," GEE Papers 0149, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Apr 2020.
    4. Daniel Gonçalves & Ana Martins, 2016. "The Determinants of TFP Growth in the Portuguese Manufacturing Sector," GEE Papers 0062, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2016.

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    More about this item

    Keywords

    Semiparametric estimation; total factor productivity; exports;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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