engleski

Panel VECM approach to examining differences in labour, capital and total factor productivity on large companies’ export revenue and export intensity

In order to answer how increases in total factor productivity, labour productivity and capital productivity affect equilibrium export growth and export intensity growth, a panel vector error correction model (VECM) is applied onto a firm level data of Croatia’s 300 largest exporters in the period 2006-2015. Significance of this study is twofold. Firstly, VECM approach determines short and long run responses to shocks in total factor productivity, labour productivity and capital productivity. Results show that shocks in total factor productivity affects export growth but not export intensity growth. Labour productivity shocks do not affect export or export intensity growth, while capital productivity shocks have an effect on both export and export intensity, whereby the system takes longer to go back to equilibrium after capital productivity shocks than total productivity shocks. Secondly, managerial and policy implications of short-term and long-term effects of total factor productivity and labour productivity on export and export intensity growth are discussed.

total factor productivity ; labour productivity ; export ; export intensity ; vector error correction model (VECM) ; impulse response function ; large companies

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