Productivity Vs. Management: What Matters in the Export Process?

Abstract

TA theoretical and empirical model to analyse the contribution of productivity and of managing/administrative practices to the exporting State is presented in this article. As regards theory, a model of multiple heterogeneity is developed. According to this, it may be possible to find differences as regards the level of two types of productivity [costs ( φ ) and management ( ζ )] between businesses in a context of monopolistic competition. For autonomous businesses, the model achieves two conditions (Zero-Profit Condition and Free-Entry Condition) that determine –first of all– which companies enter and produce in the market. Then, when economy is opened to the world, the model shows which companies survive in the domestic market as well as which ones export. Consequently, being a productive business does not necessarily imply exporting, since the decision to export also depends on how effectively the company carries out administrative practices needed to adapt its products to external demand. As for the empirical part of the analysis, the aim is to measure productivity and managing practices at the company level through different methods and specifications in order to identify how they affect the exporting State, resorting to the waves from the Enterprise Surveys of the World Bank of 2006, 2010 and 2017 for Argentina. The main findings show that the possibility of exporting is positively affected by productivity as well as by management practices. Moreover, their effects are of similar magnitude.