ABSTRACT
This chapter provides a detailed analysis of the total factor productivity differences between Portuguese exporters and non-exporters over the period 1996-2004, in the manufacturing and services sectors, and their contribution to aggregate productivity growth. The raw data is drawn from the combination of two statistical data sources, both run by Portuguese Statistical Office (INE):Inquerito as Empresas Harmonizado (IEH); and Ficheiro de Unidades Estatisticas (FUE) that contains generic features on all Portuguese firms. Despite some limited micro evidence of trade-induced aggregate productivity growth, especially for the European periphery countries the chapter is the first study that assesses the contribution of exporters to Portuguese aggregate productivity growth. There are large and persistent productivity differences across firms with only the more productive firms surviving and self-selecting into export markets. In order to compute the total factor productivity (TFP), one must first estimate the factor elasticity parameters of a Cobb-Douglas production function for each industry, to allow for sector heterogeneity.
