Identifying Supply-Side Constraints to Export Performance in Ecuador : An Exercise with Investment Climate Survey Data
The authors apply a Heckman selection model to the 2003 Investment Climate Survey (ICS) to investigate supply-side constraints to export performance at the firm level in Ecuador. To correct for the non-random truncation problems, they use the Heckm...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/03/7479758/identifying-supply-side-constraints-export-performance-ecuador-exercise-investment-climate-survey-data http://hdl.handle.net/10986/7219 |
| Summary: | The authors apply a Heckman selection
model to the 2003 Investment Climate Survey (ICS) to
investigate supply-side constraints to export performance at
the firm level in Ecuador. To correct for the non-random
truncation problems, they use the Heckman selection model to
estimate the probability of exporting (export propensity)
and the share of total sales that are exported (export
intensity) by Ecuadorian firms. They develop a baseline
model with 12 independent variables divided into three
categories-idiosyncratic characteristics, technology, and
business environment. The authors develop three other models
with the addition of variables related to trade integration,
business environment, and infrastructure. Results
corroborate with the hypothesis implicit in the Heckman
model, which considers both decisions made by a firm-whether
to export, and how much of its sales to export-to be
interdependent. In the Ecuadorian case, they find three
important results for the firm's export performance:
technology matters; infrastructure does not; and trade
orientation is significant, with specialized firms tending
to have smaller export intensity when their main trade
partners are countries of the Andean Community, and the
opposite happening if the United States is their main trade
partner. The authors find a robust and stable relationship
for export propensity and intensity with size, import of
inputs, labor regulations, in-house research and
development, quality certification, web-use, and foreign
ownership. Also, capacity utilization and trade with the
United States positively affect export intensity, while
trade within the Andean Community has the opposite effect in
the outcome variable. But they find no significant
relationship for the infrastructure variables. |
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