The Existence And Cause Of The Paradox Of Productivity In Heterogeneous Enterprises

This paper is based on the framework of firms heterogeneity model in the New-New trade theory. Firms heterogeneity model focused on the firm level, analyzed and explained the most important factor is the productivity when the firms with differences decided to enter the foreign market. The theory proved the behavior fact of the exporters that the traditional trade theory and the new trade theory failed to explain:the productivity of the exporters is higher than the domestic firms. This study combines with Chinese firms behavior, follows the classic logic thought of Melitz (2003) model, discusses the effect of total factor productivity in heterogeneous firms in deciding whether to export. The study found that Chinese manufacturing firms does not exist the so-called "productivity paradox" and it is the diversified heterogeneity which lead firms to become the entrant of the international trade.Firstly, the study uses the including the industrial firms that above the scale from1998to2006to measure the total factor productivity. Using the semi-parametric LP estimation method to estimate the production function, the results shows that the exporters’total factor productivity is significantly higher than the domestic firms, and the mean value of the sample also shows the same trend of growth between the export and domestic firms. After the measurement of the total factor productivity, obtain the samples by matching the China Industrial Business Performance Data from2000to2006with the monthly data of the Customs product level data, build a linear production function with the export value as the explained variable and total factor productivity as the core explanation variables, introduce various variables that related to the firm export decisions and the trade behaviors. Then, in the empirical study choose Heckman two-step estimation to analysis the influencing factors of firm export decision. The results show that the firms with high productivity will select to export and to the export value the productivity also act a strong role in promoting, at the same time the other explanatory variables is also very prominent in impacting the export decision and behavior. Therefore Chinese manufacture firms have no productivity paradox, the total factor productivity is not the only main factor, the firms heterogeneity in the selection of the export market and the export value show diversity characteristics.