Exporter Dynamics and Productivity Dispersion within Industry

Abstract

This paper uses firm-level panel data for Japan to examine between-firm productivity dispersion, and explore whether export market entry improves productivity and accelerates productivity catch-up by new exporters in relation to frontier firms. Even though a sizable number of firms start exporting every year, this paper’s results show that, on average, these new exporters’ productivity growth rates tends to deteriorate after export market entry. The results also imply that in the case of Japan the sluggish productivity growth experienced by almost all firms may be attributable to the very low or even negative productivity growth of national frontier firms or top exporters.