ABSTRACT

In Portugal, as in other small open economies, discussion over the role of exports in promoting growth in general, and productivity in particular, has been ongoing for many years. Indeed, there is widespread evidence of an aggregate productivity effect through resources reallocation, namely, the expansion of high-productivity exporting fi rms, reconciling microeconomic and macroeconomic fi ndings to show that more open economies grow faster (see, for example, Baldwin and Gu, 2003; Bernard and Jensen, 2004; Hansson and Lundin, 2004; Harris and Li, 2008; Gleeson and Ruane, 2009, inter al.). Since the seminal work of Bernard and Jensen (1995), a series of empirical papers have documented the superior characteristics of exporters relative to non-exporters, at least in developing countries-exporting may not be as critical for fi rms located in developed countries with a large domestic market, where scale effi ciencies have already been achieved (see Wagner, 2007 or Greenaway and Kneller, 2007, for a survey; Martins and Yang, 2009, for a meta-analysis; and ISGEP 2008, for comparable evidence on 14  countries). Two alternative, but not mutually exclusive, explanations for this phenomenon have been proposed: (i) the self-selection hypothesis, that is, only the most productive fi rms can overcome trade costs and become exporters; (ii)  the learning-by-exporting hypothesis, that is, fi rms are exposed to international competition after they begin to export and hence are able to learn and improve their performance.