The impact of exporting and importing goods and services on productivity in the UK.

Abstract

This paper investigates the impact of exporting and importing on productivity for UK plantsusing a combination of regression and propensity score matching. Unlike earlier papers, the data allows us to distinguish the effects of trade in goods and services. In confirmation of the results from other countries, we find that plants that both export and import have higher productivity than plants that only do one of these activities. In manufacturing, this is the case regardless of whether the trade is in goods or services (which suggests that servitisation of manufacturing is beneficial).In services, the results are more mixed and the benefits from involvement in international goods networks that are seen in manufacturing do not occur to the same extent (however, for the wholesale and retail sectors, trade in both goods and services is generally productivity enhancing).