Economic performance and international trade engagement: the case of Portuguese manufacturing firms

• Published in: International economics and economic policy Vol. 10; no. 4; pp. 521 - 547
• Main Authors: Silva, Armando, Afonso, Oscar, Africano, Ana Paula
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01-12-2013; Springer; Springer Nature B.V
• Subjects: Diversification; Economic aspects; Economic models; Economic Policy; Economic statistics; Economic theory; Economics; Economics and Finance; Exports; International Economics; International trade; Macroeconomics/Monetary Economics//Financial Economics; Manufacturing; Original Paper; Productivity; Public Finance; Studies; Portugal; Firm performance; F14; International trade; Diversification; C23; F23
• ISSN: 1612-4804; 1612-4812
• DOI: 10.1007/s10368-012-0221-8

By combining economic and financial data for Portuguese manufacturing firms with data on their exports and imports, we uncover some aspects of the relationship between international trade engagement and firms’ performances. In line with recent theoretical and empirical developments in the international trade literature: (i) we testify that Portuguese international trade is highly concentrated, especially on the import side, and both in inter- and intra-sector terms; (ii) we corroborate previous studies and theses according to which two-way traders outperform only importers, only exporters and above all domestic firms; (iii) we find that the greater the diversification of markets and goods (especially with regard to imports), the better the performance achieved by internationalised firms; (iv) we notice that the higher the intensity of firms’ international trade (especially imports), the better their performance; (v) we also present evidence that destination markets for exports and origin markets for imports are also important in explaining firm’s performance.