Exports and Firm Productivity: The effect of US steel safeguards. Bruges European Economic Research (BEER) Papers 19/January 2011

Purice, Victoria (2011) Exports and Firm Productivity: The effect of US steel safeguards. Bruges European Economic Research (BEER) Papers 19/January 2011. [Policy Paper]

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Abstract

This paper investigates possible negative effects of the 2002 US steel safeguards on productivity of Eurozone steel companies. The analysis is based on an extensive literature which predicts that exporting firms not only are bigger and more productive, but also that exporting itself has positive effects, improving efficiency and leading to better utilization of firm resources. The paper investigates a large sample of EU-13 steel producing firms, in the 1998 - 2005 period. Using three methods of Total Factor Productivity (TFP) estimation among which the Olley-Pakes semiparametric estimator, we first calculate the productivity levels of companies, and then check for any unusual fluctuation in this performance variable. We find that in 2002 there has been a significant drop in TFP. The paper is an invitation for further research in this field, given the possible important effects of safeguard measures on exporters.

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