Globalization, Productivity Performance, and the Transformation of the Production Process*

Abstract

AbstractIn this paper, we examine whether a firm's decision to export and its subsequent performance are related to its prior global connections. By tracking Canadian manufacturing firms over an eight‐year period between 2002 and 2010, we find that firms with prior global connections (such as importing) are more likely to subsequently become exporters. Productivity and skill intensity grow faster in this group in the short and longer run than those with no global connections. The growth advantage is affected by movements in the exchange rate. In general, growth rates in productivity and investments in physical, human, and intangible innovation R&D are greater for firms with more international connections.