Qian Cher Li

Evaluating the Contribution of Exporting to UK Productivity Growth: Some Microeconomic Evidence

This study assesses the contribution of exporting activities to aggregate productivity growth in the UK for all market‐based sectors for the period 1996–2004, using a weighted FAME dataset. Based on decompositions of productivity growth, our findings suggest that, overall, exporting firms experience faster productivity growth than non‐exporting firms and therefore contribute more to national productivity growth. In addition, aggregate productivity for exporters benefits from a large contribution from ‘continuing’ firms improving their productivity, as well as exporters that have been taken‐over/merged or started‐up as new firms. In contrast, most of the TFP improvement for non‐exporters is attributable to lower productivity firms exiting, rather than from internal improvements or the productivity‐enhancing impact of new firms.

EXPORT‐MARKET DYNAMICS AND THE PROBABILITY OF FIRM CLOSURE: EVIDENCE FOR THE UNITED KINGDOM

This study presents the first empirical analysis of the determinants of firm closure in the United Kingdom with an emphasis on the role of export-market dynamics, using panel data for a nationally representative group of firms operating in all-market-based sectors during 1997–2003. Our findings show that the probability of closure is (cet. par.) significantly lower for exporters, particularly those experiencing export-market entry and exit. Having controlled for other attributes associated with productivity (such as size and export status), the following factors are found to increase the firms survival prospects: higher capital intensity and TFP, foreign ownership, young age, displacement effects (through relatively high rates of entry of firms in each industry), and belonging to certain industries. Interestingly, increased import penetration (a proxy for lower trade costs) leads to a lower hazard rate for exporting entrants and continuous exporters, while inducing a higher hazard rate for domestic producers or those that quit exporting.

The Impact of Higher Education Institution–Firm Knowledge Links on Establishment‐Level Productivity in British Regions

This paper estimates whether sourcing knowledge from and/or cooperating on innovation with higher education institutions impacts on establishment-level TFP and whether this impact differs across domestically-owned and foreign-owned establishments and across the regions of Great Britain. Using propensity score matching, the results show overall a positive and statistically significant impact although there are differences in the strength of this impact across production and non-production industries, across domestically-owned and foreign-owned firms, and across regions. These results highlight the importance of absorptive capacity in determining the extent to which establishments can benefit from linkages with higher education institutions.

The Determinants of Firm Exit from Exporting: Evidence for the UK

Abstract This study seeks to understand to what extent new exporters are able to survive in international markets and whether exit from exporting is more likely to be associated with firm-level heterogeneity or more general factors such as trade costs and/or barriers to entry and exit (such as sunk costs). This study presents the first analysis undertaken for a nationally representative group of UK firms on the determinants of exit from exporting, using panel data covering all market-based sectors of the UK during 1997–2003. Our findings suggest that the probability of a firm ceasing to export is directly influenced by its productivity and other attributes associated with firm-level productivity differences (such as size and foreign ownership). Micro-finance factors, such as profitability and the ability to finance through long-term debt, play an additional role. Lastly, sectoral differences (e.g. industrial concentration) also help explain the firm’s exit decision, whilst trade costs lead to a higher probability of exiting from selling internationally.