1. “Exports and Productivity Link in Manufacturing: Microeconomic Evidence from Croatia” by Gorana Lukinic Cardic YES, DEK Comments by John Earle June 2010

2. What’s the Question? Two big topics: Recent literature on firm-level relationship of exports and productivity – Selection, learning – most studies find former – Theories – firm dynamics extended to X Croatia’s export performance (aggregate) – Level, growth (low) – Products, destinations (hand-wringing) Can these be connected? – Specialness of Croatia (for research) -> lessons – Could theory be more useful?

3. What’s the method? Int. description of level & composition of HR X – little used, but relevant for selection and learning? Firm-level data (brava!): manufacturing, 2002-7 Productivity regressions with pre/post comparisons – Depvar: labor productivity (could be extended) – Var of interest: X dummy (EDUM) – contemporaneous in panel regressions (but attention to dynamics) – Year and industry controls, but drop from most results with FE & 2-year samples, no industry shocks – Size control, but endogenous? – Different samples for different questions

4. How are estimates identified? Short time series -> lengthen Xer premium – pooled panel – OLS: 14%, but just descriptive – FE: only 4%, identified from switchers Focus on entrants (new Xers) relative to non-Xers Selection – 2-year pre-entrant samples – FE or group effect? Otherwise, not DiD. – Estimates never significant Learning – mostly 2-year post-entry samples – FE?

5. Are the estimates credible? Puzzling variation in Xer premia – Only small Xers & new entrants are more productive – Sample size variation (Table 9: latter/former = 2) Switchers – How stable is X behavior? Not very (check volume) – Selection estimates on entrants very wobbly – 2-year post-samples show counter-intuitive trend – Small samples -> pool years and samples (Table 14 most credible – learn less from the rest) Need narrower control group for entrants – Xers and non-Xers very different -> matching

6. How could theory be more useful? Guide to empirical design, interpretation of results Descendant from models of industry dynamics – Fixed cost of entry (Jovanovic, Hopenhayn) – Fixed cost of operating (salvage value) – Experimentation (including mistakes) Entrants (Melitz: exporting) Incumbents (Ericson-Pakes) – intensive margin more impt? Empirical regularities (“stylized facts”) could guide further theoretical development